Poor infrastructure hampers wider use of natural gas
Fitri Wulandari, The Jakarta Post, Jakarta
The lack of infrastructure to transport and distribute natural gas is a major obstacle to pushing for its wider use in order to reduce the country's heavy dependence on oil-based fuels.
Secretary-General of the Ministry of Energy and Mineral Resources Luluk Sumiarso said the disparity between supply and demand for natural gas from industries, households and power plants persisted because sources were located far from the market.
Most natural gas sources are located in remote locations on Sumatra and Kalimantan, whereas the end-users for the fuel are industries and households on heavily populated Java.
"We are working out ways to transport natural gas from remote locations," Luluk told The Jakarta Post on Tuesday, commenting on plans to promote the wider use of natural gas to prevent Indonesia from becoming a net oil importer in the future.
The Oil and Gas Upstream Regulatory Body (BP Migas) said Indonesia could become a net oil importer in 10 years if no new oil finds were discovered while oil-based consumption remained high.
In 2003, the country consumed 54.7 million kiloliters of oil- based fuels, while crude oil production continued to decline because of aging oil wells. Crude oil output stood at 1.087 billion barrels in 2003, lower than the quota set by the Organization of Petroleum Exporting Countries (OPEC).
Indonesia is the only Southeast Asian member country of the oil cartel.
Currently, the country has proven and possible natural gas reserves of 170 trillion cubic feet (TCF) and an annual production of 3 TCF. Indonesia is the largest liquefied natural gas (LNG) producer in the world, exporting 65 percent of its annual production.
President of state-owned gas utility company PT Perusahaan Gas Negara (PGN) WMP Simandjuntak said poor infrastructure for natural gas distribution was the main reason for the high export figure compared to domestic consumption.
"Gas producers prefer to sell their gas abroad, because it is easier and the price is higher," Simandjuntak told the Post.
He said domestic consumption of natural gas could be increased if the necessary transportation and distribution infrastructure was provided.
Domestic energy consumption in Indonesia is still dominated by oil at 55 percent, followed by natural gas at 23 percent, coal at 15 percent, hydropower at 4.1 percent and geothermal energy at 2.9 percent.
With a core business in natural gas transmission and distribution, PGN has been working on several pipeline projects to channel natural gas from gas-producing areas to end-users in Java.
The company is now completing a transmission pipeline from gas fields operated by state-owned oil and gas firm PT Pertamina in Prabumulih, South Sumatra, to West Java, which is expected to be finished by 2006.
Another major project is its pipeline transmission facility linking East Kalimantan and East Java.
Besides pipelines, another mode of channeling gas is through terminal facilities.
Luluk said state-owned electricity company PLN and PGN were studying the possibility to build terminal facilities.
LNG from natural gas sources on islands outside of Java can be transported by using vessels to the terminal facility. Upon arrival at this facility, the LNG is then gasified and distributed to customers through pipelines.