Pertamina to supply CNG for public transportation

Pertamina to supply CNG for public transportation

Bambang Nurbianto, The Jakarta Post, Jakarta

Despite the huge losses it incurs in producing compressed natural
gas (CNG), state-owned oil company PT Pertamina says it is still
willing to supply the product to public transportation operating
in the city.

Didik Wiryadi, head of Pertamina's Domestic Market Division,
urged the city administration, however, to first implement Bylaw
No. 2 of 2005 on air pollution to the fullest.

The bylaw, which was endorsed in February but which will take
effect only next year, requires all public transportation and
city-owned vehicles to use CNG.

According to Didik, only 2 percent of the CNG allocated for
public transportation is currently being consumed across the
country.

"We are allocating nine mega million standard cubic feet
(MMSCF) of CNG for vehicles per year, but only around 1.5 MMSCF
is used, mostly in Jakarta," Didik told The Jakarta Post on
Monday.

According to Didik, CNG consumption had continued to decline
over the past few years. CNG consumption reached 14.74 million
liters in 2004, down from 17 million liters in 2003, 19.52
million litters in 2002 and 21 million liters in 2001.

The slide in sales had resulted in losses of around Rp 24
billion (US$2.67 million) per year as operational costs for
Pertamina were much higher that turnover.

Ideal annual sales of CNG, according to Didik, should be
around 60 million liters per year.

The falling CNG consumption had prompted Pertamina to close
dozens of CNG stations in the capital and across the country.

There were 17 CNG stations in the Greater Jakarta, but only
ten were still operating. Nationwide, there were 21 CNG stations,
but only 12 were still working.

Didik said his company was still discussing a memorandum of
understanding involving Pertamina, the Jakarta administration and
PT Perusahaan Gas Negara (PGN) on CNG distribution for public
transportation vehicles operating in the capital.

PT PGN is responsible for distributing gas produced by
Pertamina through gas pipelines.

Didik stressed the need for the city administration to be
serious in enforcing the bylaw, and in particular to require
public transportation vehicles in the city to use CNG in order to
create market certainty.

He said the private sector would only invest in constructing
CNG stations in the city if there was market certainty.

"Pertamina will not construct any more CNG stations in the
city if there is no guarantee of a market. We would welcome the
entry of other investors who are interested in establishing CNG
stations," he said.

Environmentalists have long campaigned for the use of natural
gas as a transportation fuel as it this would reduce the problem
of pollution caused by vehicular emissions.

They say that the 80,000 public transportation vehicles
operating in the city represent a captive market for CNG if the
administration consistently required them to use CNG for the sake
of air quality in the capital, which is currently the third most
polluted city in the world.

CNG stations in Greater Jakarta.

1. Jl. Sumenep, Central Jakarta

2. Jl. Pemuda, East Jakarta

3. Jl. Raya Pluit, North Jakarta

4. Jl. Warung Buncit, South Jakarta

5. Jl. Margonda Raya, Depok

6. Jl. Jl. Boulevard Timur, Kelapa Gading, North Jakarta

7. Jl. Pasar Minggu, South Jakarta

8. Jl. Daan Mogot, West Jakarta

9. Jl. Raya Bekasi KM 28, West Bekasi

10. Jl. Tebet Timur, South Jakarta

Source: Pertamina