Govt mulls shipping CNG, plans pilot for Bali
Leony Aurora, The Jakarta Post, Jakarta
The Ministry of Energy and Mineral Resources will set up a task force to study the possibility of transporting compressed natural gas (CNG) by sea, with Bali serving as a pilot project.
Bali is seen as the best location for the pilot project because the power plants and industries there can absorb a CNG supply of between 150 million standard cubic feet per day (mmscfd) and 250 mmscfd, which is necessary to make the project commercially feasible, according to a study by a consortium that includes South Korea's Samsung and Japan's Sumitomo Corp.
Sea transportation also suits Bali as the island cannot be reached by gas pipelines due to its topographical conditions.
A feasible distance for the project is between 500 nautical miles and 1,000 nautical miles, which means the CNG can come from gas-rich East Kalimantan or the Matindok field in Sulawesi.
"The ministry's Directorate General of Oil and Gas will lead the task force," said energy minister Purnomo Yusgiantoro on Thursday during a meeting with the consortium, whose members also include state power firm PT PLN and state gas distributor PT PGN.
The task force will comprise PLN, PGN, the Oil and Gas Upstream Regulatory Agency (BP Migas) and the Oil and Gas Downstream Regulatory Agency (BPH Migas).
The study done by the consortium shows the transportation costs for 150 mmscfd of CNG would be US$2.45 per million British thermal unit (mmbtu). Assuming the unit price of $2 per mmbtu, the gas could be sold at $4.45 per mmbtu -- excluding the cost to build a CNG plant and storage infrastructure.
In comparison, diesel fuel costs $9.14 per mmbtu-equivalent, assuming global crude oil prices of $46 per barrel.
Consortium head Anton Tjahjono said the project would take three years to materialize due to the lack of availability of shipyards to build six CNG vessels with a capacity of 36,000 tons each.
"We will get export credit facilities from Korea amounting to $750 million to construct the vessels," he said.
Members of the consortium will also contribute another $200 million in total of their own funds for the project.