Indonesia hopes to tap lucrative Asian gas market
Fitri Wulandari, The Jakarta Post, Batam
Indonesia is gearing up to tap the huge potential of the Southeast Asian gas market with the launching of a gas transmission pipeline from Grissik to Sakra, Singapore, on Monday, a senior government official said on Sunday.
The completion of the pipeline will enable Indonesian gas producers to look for more buyers in the region.
"Within Southeast Asia, Indonesia is the only country that has huge gas reserves. Consequently, we are increasing our gas sales to the region," director general of oil and gas Iin Arifin Takhyan told a media briefing in Batam.
According to Iin, several discussions were ongoing between Indonesian gas producers with potential buyers in ASEAN countries, including firms in Singapore, Malaysia and Thailand on the possible purchase of gas from Indonesia.
The gas transmission pipeline from Grissik, South Sumatra, to Sakra, Singapore, which is scheduled to be officially inaugurated by President Megawati Soekarnoputri and Singapore's Prime Minister Goh Cok Tong on Monday is the third from Indonesia to neighboring countries.
At present, Indonesia has gas transmission pipelines from West Natuna to Singapore, supplying 250 million standard cubic feet per day (MMSCFD). Another is from West Natuna to Malaysia, to supply some 150 MMSCFD.
The Natuna islands, located in the South China Sea, are one of the most natural gas-rich areas of the country.
Unlike the previous gas transmission pipelines, the Grissik- Sakra link will be a milestone for an open access gas transmission system. The system allows gas transmission from various resources at the same time.
This will provide buyers with assurance on the security of supply. It is also expected to be an embryo for a wider trans- ASEAN gas pipeline.
WMP Simandjuntak, president director of state owned gas distribution and marketing firm PGN, which owns the pipeline, said apart from sending gas to Singapore, the pipeline would also have a multiplier effect on growing industry in Batam.
"Without energy, it would be difficult to develop industry here in Batam," he remarked.
The pipeline will carry gas supplies from gas fields in the Corridor Block and South Jambi Block, operated by ConocoPhillips, and the gas fields in the Jabung Block operated by Petro China, to PowerGas Ltd, a subsidiary of Singapore Power, in Sakra Island.
Initially, it will supply 150 MMSCFD of natural gas. The volume will gradually be increased to more than 350 MMSCFD.
According to Simandjuntak, on top of the gas supplies to Singapore, the pipeline will also transport some 125.9 MMSCFD of gas to Batam, which will be distributed to several industrial areas and a power plant on the island via the Batam Distribution Network.
The pipeline has the total length of 470 kilometers (km), including 206 km above land and 260 km underwater. Development of the transmission pipeline cost PGN US$420 million, with $88 million of the investment costs coming from the Asian Development Bank, $112 million from the European Investment Bank and the remaining $220 million from PGN and partners' internal resources.
According to Simandjuntak, the pipeline was integrated with an optic fiber network for data, audio and video delivery, linking Sumatra and Batam to Singapore. This network would provide people in Sumatra and Batam with direct access to Singapore's advanced telecommunications network.