Crisis forces RI to delay natural gas pipeline projects<\/p>\n
SINGAPORE (Reuters): Gas pipeline projects in Indonesia have
\nbeen delayed as a result of the country's economic woes as would-
\nbe financiers hold off negotiations until the rupiah stabilizes,
\na senior official said yesterday.<\/p>\n
\"All the projects have been affected by the crisis at the
\nmoment,\" Qoyum Tjandranegara, President Director of state gas
\nutility company PT Perusahaan Gas Negara (PGN), told Reuters in
\nan interview.<\/p>\n
\"Projects have been postponed for at least one year.\"<\/p>\n
He said a plan to build a natural gas pipeline network from
\nSouth Sumatra to Cilegon in west Java, which would also connect
\nwith Asamera's Corridor Block and Palembang in South Sumatra, had
\nbeen shelved as finances have not been firmed.<\/p>\n
The whole project was expected to cost around US$590 million,
\nhe said.<\/p>\n
\"Negotiations with the World Bank for financing of the project
\nwas supposed to be in October last year, but it has been delayed
\nby one year,\" Tjandranegara said.<\/p>\n
He said other projects delayed included a pipeline from East
\nKalimantan province to east Java, and another from East Natuna to
\nJava as talks with finance companies have also been postponed.<\/p>\n
Talks with the finance companies for these projects were
\nsupposed to start last year, he said.<\/p>\n
Most energy infrastructure projects in Indonesia are financed
\npartly by the private sector, and partly by the government,
\nalthough there is no fixed percentage of the breakdown,
\nTjandranegara said.<\/p>\n
He was in Singapore for a conference on gas pipeline
\ninfrastructure in the Asia Pacific region.<\/p>\n
The Asian crisis had affected PGN badly since it bought gas
\nfrom state oil company Pertamina in U.S. dollars, but sold to the
\ndomestic market in rupiah.<\/p>\n
Indonesia's economic woes were triggered by a sharp
\ndepreciation in the rupiah, which has lost 70 percent of its
\nvalue against the U.S. dollar since July.<\/p>\n
In February, Pertamina asked the government to assist PGN
\nfinancially because of the fall in the value of the rupiah and
\nthe government responded with a Rp 75 billion loan to PGN,
\nTjandranegara said.<\/p>\n
He said he expected that to last around three months, but was
\nhopeful of a stabilized rupiah by that time.<\/p>\n
Tjandranegara said the government was also trying to promote
\ngas pipeline projects to make gas supplies readily available and
\nreduce the country's dependence on imports of more expensive
\ndiesel for power generation.<\/p>\n
\"To import diesel, you would pay more than if you buy gas
\ndomestically,\" he said.<\/p>\n
Indonesia is one of the largest spot buyers of diesel in
\nSoutheast Asia, taking around three to five million barrels per
\nmonth on average.<\/p>\n
For March, Pertamina attempted to stop diesel imports to save
\non foreign exchange, but was forced to resume purchases due to
\ninadequate domestic supplies following an unexpected shutdown of
\nits 125,000 barrels-per-day Balongan refinery.<\/p>\n
Tjandranegara said that only 10 percent of power in Indonesia
\nis obtained from using gas, with diesel making up the bulk.<\/p>\n
This, he said, was mainly due to inadequate infrastructure and
\nthe inability of power stations to get easy access to gas.<\/p>\n
He said supplies were ample and most power plants in Indonesia
\ncould switch easily from using diesel to gas.<\/p>\n
By 2020, the government is planning to have adequate
\ninfrastructure and raise the usage of gas to for power up to 45
\npercent, he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/crisis-forces-ri-to-delay-natural-gas-pipeline-projects-1447893297",
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