National

Rp60 Trillion Could be Saved by Using Natural Gas
Tuesday, 23 August, 2005 | 13:49 WIB

TEMPO Interactive, Jakarta:The use of natural gas as a primary energy source to replace oil-based fuels price could save Rp60 trillion of the state’s finances.

According to WMP Simandjuntak, Executive Director of the State Gas Company (PGN), such savings could be made if gas supplies reach 30 million kilolitres by 2009.

By using gas, the burden of oil-based fuel subsidies would be reduced.

Savings such as these could be achieved when the crude oil price reaches US$70 per barrel.

It is estimated that savings from subsidies in the electricity sector could reach Rp35 trillion and the industrial sector around Rp30 trillion.

“The gas supplies would come from East Kalimantan, Papua and South Sumatra,” Simandjuntan told reporters on Monday (22/08).

Currently, the government is in the middle of constructing two liquefied natural gas (LNG) refineries in the Tangguh gas field, Papua, at a cost of US$1.4 billion.

This is carried out by a national consortium with the support of foreign parties.

The national companies involved in this consortium are the State Electricity Company (PLN), PGN and Petrokimia Gresik.

Another project, the construction of gas transmission pipes from East Kalimantan to Java, requires funds amounting to around US$1.2 billion.

Tubagus Haryono, Head of the Oil & Gas Downstream Activities Management Board (Batur), said that the length of the pipes from East Kalimantan to Java would be around 1,200 kilometers.

Batur will soon hold a tender for the rights to distribute this gas from East Kalimantan.

Zanial Achmad, Planning Deputy Oil & Gas Upstream Executing Body (BP Migas) said that he would check the oil reserves volume in East Kalimantan.

This will be carried out together with the oil and gas profit-sharing contractor.

In addition, BP Migas will also check the gas deliverability.

Herman Ibrahim, PLN’s Generating Director, said that the gas needed on Java was between 6.5 and 7 million tons per year.

Ibrahim added that the use of natural gas would be very important to support PLN’s work performance in providing electricity.

“I’m convinced that the use of gas will be able to lessen the production cost of electricity,” he stated.
(Budi Riza-Tempo News Room)