Pipeline brings ASEAN dream closer

Pipeline brings ASEAN dream closer

Fitri Wulandari, The Jakarta Post, Batam

President Megawati Soekarnoputri and Singapore's Prime
Minister Goh Chok Tong inaugurated on Monday a natural gas
transmission pipeline linking Sumatra to Singapore, bringing the
Southeast Asia region a step closer to the realization of the
trans-ASEAN gas pipeline project.

Megawati said the US$420 million project was significant as it
would not only help to develop Indonesia's rich gas resources but
also stimulate economic growth in the country and the region.

"This important step is aimed not only at reducing
unemployment in our country but also at developing common
prosperity in the region," she said in her speech during the
inauguration ceremony, which was held at the Panaran receiving
station in Batam.

In his speech, Prime Minister Goh Chok Thong underlined that
the project was important for the realization of the Trans-ASEAN
Gas Pipeline project, which was aimed at providing greater
security and sustainability in energy supplies -- something that
is crucial for the development of the region's economy.

"The significance of the Sumatra-Singapore pipeline goes
beyond bilateral relations. The pipeline is an important link in
the Trans-ASEAN Gas Pipeline Project, or TAGP," Prime Minister
Goh Chok Tong said.

"I hope ASEAN will now work fast to implement the project.
Successful regional cooperation reinforces investor confidence in
the cohesiveness of ASEAN and our seriousness in integrating our
economies," he remarked.

Energy ministers and officials from Thailand, Myanmar,
Malaysia and the Philippines also attended the ceremony.

Aside from the Natuna islands in the South China Sea, Sumatra
is projected to become the main source of gas for the Trans-ASEAN
Gas Pipeline Project. Natural gas is already piped into Singapore
from gas fields in West Natuna through a 640-kilometer pipeline
launched two years ago.

Called the Interstate Gas Transmission project, it involves
collaboration between Indonesian state-owned gas distribution and
marketing firm PT Perusahaan Gas Negara (PGN) and Singaporean gas
utility, Power Gas Ltd.

Stretching 470 kilometers from Grissik in South Sumatra to
Singapore's Sakra island via Sakernan in Jambi and Batam island,
the pipeline consists of an onshore section of 229 kilometers and
offshore section of 241 kilometers.

The pipeline will transmit 150 million standard cubic feet per
day (MMSCFD) of gas from fields operated by ConocoPhillips and
PetroChina in Sumatra to Power Gas, with the volume to be
gradually increased to 350 MMSCFD. The supply contract lasts for
20 years.

It is expected to generate some $700 million in foreign
exchange earnings for Indonesia annually and employ some 2,500
Indonesian workers.

In addition, the pipeline will supply Batam with some 150
MMSCFD, providing cheap and clean fuel for industries and power
plants on the industrial island.

Indonesia's minister of energy and mineral resources Purnomo
Yusgiantoro said that following the completion of the Grissik-
Sakra pipeline, Indonesia was now mulling the building of another
pipeline for the transmission of natural gas from Sumatra to
Malaysia's West Coast.

"(Indonesia's state-owned oil and gas firm) Pertamina and
(Malaysian state-owned oil and gas firm) Petronas are negotiating
the gas supply deal now. We hope the deal will be concluded as
soon as possible," Purnomo said.

Washington Mampe Parulian Simandjuntak, PGN's president
director said the Interstate Gas Transmission project would start
delivering gas to Singapore on Aug. 12.

He said the project was a significant achievement for PGN as
it was the company's first submarine gas pipeline.

Further, he added that the project was also an integral part
of a major plan to build the Indonesian Integrated Transmission
Pipeline (PTGI), which was aimed at meeting the demand for gas
across the country.

According to Simandjuntak, PGN planned to build a gas
transmission pipeline linking Grissik to Jakarta via Pagardewa in
South Sumatra and Cilegon in West Java. The 399-kilometer
pipeline was expected to be completed in 2006.

The pipeline would transmit gas from South Sumatra to the
industries of West Java, as well as the Muara Karang power plant
in Jakarta, which is run by state-owned electricity company PT
PLN.

Another planned project was a 380-kilometer gas transmission
pipeline from Duri to Belawan, North Sumatra, which would be
capable of transporting 250 MMSCFD of gas.

In addition, PGN would build gas receiving terminals in West
Java and East Java to supply Java with liquefied natural gas from
the Tangguh LNG complex in Papua and Donggi in South Sulawesi.
The LNG would ensure uninterrupted gas supplies to the island.