A new pipeline belonging to state-owned oil and gas firm Pertamina and state-owned gas firm PT Perusahaan Gas Negara (PGN) is expected to spur industry growth in Riau province when it starts operating in the third quarter of 2018.
The two firms signed a head of agreement (HOA) on Friday to construct and operate a new 67-kilometer pipeline from Duri to Dumai in Riau. “With a 60 percent stake going no Pertamina. The Pipeline transit around 140 million metric standard cubic feet of gas per day (mmscfd) when it operates.
PGN president director Jobi Triananda Hasjim confirmed that a portion of the gas would be sourced from the Corridor gas field in South Sumatra, which is currently being operated by ConocoPhillips, and provide affordable gas for refineries and petrochemical plants in the region.
Jobi said the new pipeline was expected to trigger industrial growth in the region, as new gas infrastructure often encourages development of the downstream sectors.
“Gas infrastructure often triggers the industrial sector. When a pipeline was built in Cilegon [in Banten], industries grew there, and when a PGN pipeline was built from Bekasi to Karawang [in West Java], the industries also built there. We hope that this new pipeline will do the same,” he said during a press conference.
Sumatra is still the second largest growth machines for Indonesia after Java. Data from the Central Statistics Agency (BPS) shows that Sumatra contributed to almost 22 percent to economic growth in the first quarter of 2017, while the island’s growth itself rose by 4 percent year-on-year.
PGN infrastructure and technology director Dilo Seno Widagdo said that PGN and Pertamina had agreed to an investment of around US$76 million for the pipeline.
While land acquisition issues are rife in the country, Dilo assured that it would not be much of a problem in this project as around 70 percent of the pipeline would go through main roads, and the remaining would go through plantations.
Friday’s agreement marked a new beginning for PGN and Pertamina. PGN has long competed against PT Pertamina Gas, a Pertamina subsidiary, in the development of gas infrastructure.
The Government has state it is looking to merge PGN and Pertamina under the supervision of the latter as the future state-owned holding company in the oil and gas sector.
By then, Pertamina will take over 57 percent shares in PGN owned by the government. The PGN Pertagas merger is expected to save at least $1.6 billion in investment and accelerate infrastructure projects, such as gas pipelines, floating storage regasification unit (FSRU) facilities and the monetization of gas infrastructure.
The State-Owned Enterprises Ministry’s deputy of energy logistics, estates and tourism business, Edwin Hidayat Abdullah, said that PGN and Pertamina must continue to work together to create efficient and accessible energy for the masses and the industry. “There is still a lot of work to be done. We no longer want to hear that PGN owns one set of pipelines, while right across it is Pertamina’s,” he said.
PGN currently operates around 7,278 km or 80 percent of all downstream gas pipelines in the country distributing around 1,599 mmscfd. The need to streamline and integrate the country’s gas infrastructure may be more urgent than ever following the government’s latest data, which shows that domestic gas supplies will be unable to fuliill-demand between 2017 and 2022.
Jakarta Post, Page-13, Saturday, June 10, 2017
No comments:
Post a Comment