Pertamina Ready to be the Backbone of National LNG Utilization

abarrelfullabarrelfull wrote on 26 Apr 2012 09:02
Tags: asia indonesia lng pertamina top

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PT Pertamina (Persero) is ready to be the backbone of domestic natural gas utilization. The Company is completing various liquefied natural gas (LNG) receiving infrastructures, which are the answers to the increasing national demand of gas.

Pertamina Director of Gas, Hari Karyuliarto, said that the shipping of Bontang LNG for domestic use was an important and historical milestone in the country's effort to build energy independence and security.

This momentum is a start of the second extraordinary phase of national LNG industry, following Indonesia's success in monetizing natural gas into LNG for export purpose in 1970s. It was conducted through two LNG processing mills: the mill in Bontang, East Kalimantan; and the mill in Arun, Nangroe Aceh Darussalam.

"In the past, oil price was relatively low and domestic oil production was still high. That was the reason why utilization of natural gas for domestic use was not prioritized. On the other hand, the discovery of two huge natural gas reserves - in East Kalimantan and Aceh - made gas export a natural option. Beside the project economic value, it also brought in income for the State, as the country still depended largely on income from oil and gas sales," Hari said.

However, in recent years, the oil production has been decreasing, more natural gas has been discovered, production of natural gas has been increasing, and rapidly rising global price for crude oil has been driving up the prices of the petroleum products. This has shifted the domestic consumers' attention to the relatively cheaper natural gas. As the economy develops and manufacturing industry grows, the demand for electricity has been rising.

This positive growing trend has given rise to new demand for gas, which has to be met quickly by the building of integrated natural gas infrastructure to connect gas sources to consumers. Pertamina has to consider the geographical contour of archipelagic Indonesia and the distance between gas sources to consumers that are divided by vast water.

"Through Nusantara Regas, FSRU Regas Satu has docked at Jakarta Bay, West Java. It is ready to begin operation. Today, the inaugural shipment of domestic LNG for FSRU West Java was achieved. This has to be recorded as a historical moment in creating national energy independence and security," Hari said.

The future demand for domestic gas is predicted to increase rapidly, that is from 3,500 MMSCFD in 2009 to 4,700 MMSCFD in 2015. This demand is driven by government programs to revitalize fertilizer plants for ensuring national food security, to optimize the natural gas for power generation, to fulfill demand for industry raw material, and the fuel to gas conversion program for transportation and household use.

"The increasing demand has to be answered by having more LNG-receiving infrastructures and gas transportation pipes. Pertamina is ready to be the backbone for fulfilling the gas demand by speeding up the construction of national natural gas infrastructures," he said.

In short term, Pertamina is going to complete some national infrastructure projects, including the modification of Arun LNG Terminal to become a receiving terminal, construction of transmission pipeline from Aceh to North Sumatera, construction of Integrated Trans Java Pipeline network, and construction of LNG receiving terminals at nine locations to support the PLN's power generation effort to fulfill electricity demand in eastern Indonesia.

"As such, we have the interest in securing national LNG supply so that we can increase the usage of LNG as more efficient and environmental-friendly alternative energy source in this country. We also support government effort to encourage gas producers to prioritize domestic gas demand."

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