JAKARTA (TheInsiderStories) – Indonesia is projected to require investment of US$70-80 billion to develop gas infrastructure to support rising domestic gas demand, which is projected to maintain a growth of 4-5% per annum, according to a Pertamina top official.
Chairman Indonesia Gas Society, who is also Acting President Director of Pertamina Yenni Andayani said the increase domestic energy demand is driven by a rise of middle class as well as steady growth of gross domestic product (GDP). The growth is higher than the average growth of global energy demand.
She said around 15% of the domestic energy needs will come from gas, while the remaining will come from coal, oil and others. Indonesia is huge natural gas reserves, however, it has yet to be fully utilized due to lack of gas infrastructure to deliver the gas from gas fields to end consumers.
Currently, Indonesia has a number of LNG processing plants such as in Arun, Bontang and Donggi Senoro. Indonesia also has gas transmission pipelines from gas fields in Mahakam and Corridor block in Sumatera.
The demand for natural gas going forward is projected to increase, driven by demand from power plants such as PLN, which is estimated to reach 14 GW that will support the government’s 35 GW power plant development program. In addition, Pertamina is also developing refinery development master plan programs and new grass root refinery.
“These projects will drive up gas demand and the challenges going forward is how to meet this demand. Indonesia needs new investments to explore and exploit new gas resources as well as developing gas infrastructure to send the gas to end consumers,” said Yenni at the International Indonesia Gas Conference & Exhibition 2017,
Based on Pertamina’s assessment, Indonesia needs investment of around US$70-80 billion until 2030 to develop gas infrastructures. “Therefore, there is a need for coordinatino between all stakeholders as well as incentives and competitive price to attract investment,” she said.
PJBG
Meanwhile, Pertamina signed gas sales and purchase agreement (SPBG) and agreement to develop gas distribution network to households in Balikpapan with the government. Pertamina will deliver gas from gas fields owned by Chevron Indonesia company with volume of 1.5 MMSCFD until 2018 to the consumers in Balikpapan.
The agreement was signed by VP VP Natural Gas Pertamina, Wiko Migantoro and VP Commercial Chevron Indonesia John White and witnessed by Deputy Energy and Mineral Resources Minister Arcandra Tahar. Pertagas, a unit of Pertamina, will deliver the gas to 3,849 households in the town. (*)