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.