To boost the utilisation of natural gas for domestic purposes, the government has prepared nine gas infrastructure projects with a total investment value of Rp 77.93 trillion $8.5 billion.
The projects, which are included in the work plan of downstream oil and gas regulator BPH Migas, are estimated to be completed in six years, says BPH Migas committee member A. Qoyum Tjandranegara.
“Gas exports have long caused severe losses for the country. We export a cheap energy source while we import the expensive one [oil-based fuel] in exchange,” he told House of Representatives Commission VII in Jakarta on Wednesday.
Indonesia’s gas is exported to China and Korea for $3.88 per million British thermal unit (mmbtu), while the country’s industries have found difficulty in accessing the gas although they were willing to pay up to $7 per mmbtu, he continued.
Upstream oil and gas regulator BPMigas’s cites the 2011 natural gas supply contract as saying that 4,366 mmscfd, or 56.78 percent of the total sales of 7,688 mmscfd, would go to the domestic market with the remaining 43.22 percent, or about 3,322 mmscfd, earmarked for exports.
In 2010, the gas sold in the domestic market totalled 4,342.7 mmscfd, which was about 50.18 percent of the total sales of 8,654.29 mmscfd.
Qoyum said boosting the utilisation of gas for domestic purposes was even tougher because the government did not provide subsidy for gas. Many other countries, except developed countries, provide a gas subsidy.
“The utilisation of gas in the transportation sector has also declined. In 1984, we had 18 gas stations, now there are only 12,” he reported.
“If you ask the government why the gas isn’t utilised for domestic purposes, the answer is normative: Because the country lacks the infrastructure [to store and transport the gas],” he added.
In a bid to solve that problem, the government has introduced the nine projects. The projects are the Natuna-West Java pipeline, which can transport 1,200 million standard cubic feet per day (mmscfd) of gas; the East Kalimantan-East Java pipeline, which has a capacity of 900 mmscfd; the Cirebon-Semarang pipeline, whose capacity is 400 mmscfd; the South Sumatera-West Java (SSWJ) I and II compressor expansion with capacity 1,100 mmscfd; and Train 3 at the Tangguh liquefied natural gas (LNG) plant in Papua with a capacity of 534 mmscfd.
The remaining four projects are the floating storage and re-gasification unit (FSRU) in Belawan, North Sumatera; FSRU in Jakarta Bay, West Java; FSRU in Central Java; and compressed natural gas (CNG) trucks, mother and daughter stations.
There are also four additional projects: The Semarang-Surabaya pipeline, the SSWJ III pipeline, an LNG plant in Maluku and an LNG plant in Sulawesi. However, BPH Migas’s data does not reveal the investment value of those projects.
Indonesia’s gas users have called on the government to increase gas supply for them.