PGN builds gas distribution network
PGN builds gas distribution network
JAKARTA (JP): The state-owned gas distribution company
Perusahaan Gas Negara (PGN) is investing a total of US$1.27
billion to expand its gas distribution network in Sumatra, Java
and Sulawesi, the company said yesterday.
The coordinating executive of the Indonesia Gas Transmission
Project at PGN, Adil Abas, said the funding was allocated for
three gas pipeline projects in the three islands.
Adil said the first project would development a gas
distribution network from the gas field operated by Asamera in
Gersik, Musi Banyuasin, South Sumatra to the Caltex oilfield
project in Duri, Riau and to Batam island, also in Riau.
The 544 kilometer Gersik-Duri pipeline would deliver 310
million cubic feet per day (MMCFD) of natural gas from Asamera's
gas field to Duri, and another 275 MMCFD of gas to Batam.
In Duri, Caltex would use the gas to replace the use of crude
oil in pumping crude oil wells, while in Batam, the gas would be
marketed to industries.
The distribution of the gas from Batam was still being
considered, Adil said.
"The development of the pipeline from Gersik to Duri started
early this year and is scheduled for completion by the middle of
next year," Adil said at a workshop on the company, organized by
the company and the Jakarta branch of the Indonesian Journalists
Association.
"The gas pipeline to Batam will be tendered early next year,"
he added.
Adil said the pipeline linking Gersik and Duri would branch
out in Sekernan, South Sumatra to continue to Batam with a
distance of 400 km, of which 200 km would be underwater.
He said PGN would invest $590 million for the development of
the Gersik-Duri-Batam pipeline. The money was provided as a soft
loan by the Asian Development Bank, JEXIM, the European
Investment Bank (EIB) and the World Bank.
The second pipeline project would develop pipelines connecting
South Sumatra to West Java.
A pipeline would be built along the distance of 520 km from
Gersik to Prabumulih, South Sumatra to Cilegon in West Java to
deliver 250 MMFCD of gas.
Another pipeline would be built to deliver gas over 280 km
from Cilegon to the industrial complex in Subang, also in West
Java.
"West Java is a big potential market with a demand of between
600 MMFCD and 700 MMFCD of gas," said Adil.
The South Sumatra-West Java gas pipeline project would be
financed with a soft loan of $600 million from the ADB and the
World Bank, he said.
Adil said the financiers had been committed to the project and
would make an appraisal in February 1998.
The construction of the South Sumatra-West Java gas pipeline
project is scheduled to start in 1999 and to be completed in
2001.
The third project PGN plans to develop until the year 2000
would be the 300 km gas pipeline in South Sulawesi from Sengkang
to the province's capital of Ujung Pandang to supply 140 MMCFD.
The project cost is estimated by the ADB to cost $80 million.
"The financial appraisal will be made next January," Adil
said.
Indonesia has 135.6 trillion standard cubic feet of natural
gas resources, enough for 45 years of exploitation.
Government data states that 56 percent of the gas is turned
into liquefied natural gas (LNG) for export and 19 percent for
domestic sales for industrial, household, power generation and
other purposes. (jsk)