Prospects for the Development and Improvement of Natural Gas Utilization in Kalimantan, Through the Construction of Trans Kalimantan Transmission Pipeline

Figure 1. The participants of the Focus Group Discussion (FGD)

Downstream Oil and Gas Regulatory Agency (BPH Migas) held a Focus Group Discussion (FGD) session for two days on 31 July – 1 August 2019 in Palangkaraya, Central Kalimantan. The FGD discussed the plan for pipeline transmission and distribution development in Kalimantan. The FGD involved many parties, consisted of the House of Representatives (DPR RI), Regional Representatives Council (DPD RI), local governments, related institutions, business entities/investors, and academics. The Purnomo Yusgiantoro Center (PYC) was invited as one of the academic representatives to present the role of academics in implementing the development plan of Trans Kalimantan natural gas transmission and distribution pipeline.

The FGD was opened by Governor of the Central Kalimantan Province, Mr. Sugianto Sabran. In his opening remarks, the Governor explained the potential of the region and the capability of Central Kalimantan Province to build a Trans Kalimantan gas pipeline. Moreover, the governor confirmed that now Central Kalimantan has applied to be a candidate for the national capital of Indonesia.  Furthermore, Dr. M. Fanshurullah Asa, Head of BPH Migas, said that the purpose of the FGD is to accelerate the development plan and utilization of natural gas in Kalimantan with the development of transmission and distribution pipeline.

The first day was focused on the supply and demand side, where the local governments and State-owned Electricity Company (PLN) presented the condition and energy needs of each region in Kalimantan. The local governments stated that the Kalimantan citizens support the development of Trans Kalimantan natural gas pipeline due to the high dependency and scarcity of Liquefied Petroleum Gas (LPG). However, there are still many aspects that need to be improved from the demand sector so that it can attract potential investors. The local governments need to participate more in the mapping of the potential client and accelerate the realization of Special Economic Zones (KEK) and Industrial Zones (KI), so there will be more market for natural gas in Kalimantan. On the other hand, the Indonesia electricity supplier, PLN, also agrees to develop a natural gas pipeline in Kalimantan as they need to replace their Diesel Power Station (PLTD) by 2020 and Gas Power Station (PLTG) can be the suitable solution to replace the PLTD in Kalimantan.

The second session discussed the supply sector, which was The Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) and PT Pertagas Niaga field of expertise. SKK Migas raised the concern regarding the decline in Indonesia oil and gas lifting, and the sustainability of the gas supply. At the same time, they also proposed an idea to apply a price blending mechanism between domestic and export sales, so the investor can still make a profit while provides the domestic needs of natural gas. The representative of PT Pertagas Niaga explained about the Liquified Natural Gas (LNG) scheme in Kalimantan. PT Pertagas Niaga already has an LNG Supply project for a 2×20 MW capacity gas power plant in Sambera, Kutai Kartanegara Regency, East Kalimantan Province.

The third session is the policy side discussion. The speakers included representative of the Vice President’s Secretariat, the National Energy Council (DEN) and Representative of the National Planning and Development Agency (Bappenas). The representative of the Vice President’s Secretariat talked about the government support for equitable distribution and development in all regions of Indonesia, especially the construction of the Kalimantan gas network. Meanwhile, DEN emphasized that the use of oil and coal must be limited in the future, in accordance with Indonesia’s national energy policy. Currently, DEN is overseeing the Regional Energy General Plan (RUED). DEN supports the plan to build a gas network in Kalimantan, but the priority of the RUED must be resolved in each region, especially in Kalimantan. Furthermore, the representative of Bappenas said that Bappenas had prepared a National Medium-Term Development Plan (RPJMN) 2019 – 2024, which included the development of the gas network in Indonesia.

The second day of the FGD was allocated for the academics, the DPR RI, and DPD RI, and business entities/potential investors. PYC as one of the academic representatives, proposed a strategic idea to impose a task force for accelerating the development of the Trans Kalimantan natural gas pipeline. This task force will adopt the quadruple helix concept and consists of business entities, governments, academics, and society representatives. Their main task will be integrating the idea of the members to tackle all the potential obstacles for the Trans Kalimantan natural gas pipeline development.

Furthermore, the DPR RI, DPD RI and Governor of East Kalimantan agreed to accelerate the development of the Trans Kalimantan natural gas pipeline and encourage the investor to involve the Region-owned Enterprise (BUMD) in the implementation. They also suggested preparing a follow-up program after the FGD to realize the results of the FGD, for example, a closed meeting between the President of Indonesia and all the active governors from Kalimantan. Afterward, in the last session, the potential investors talked about their respective performance and experience in building a natural gas transmission and distribution pipeline. They were also willing to invest in Kalimantan and encourage all the related institutions to promote and enhance the use of natural gas as the investment decision will highly dependent on the potential market size. They also suggested the local governments to realize their General Planning for Regional Energy (RUED), so it will attract more users and investors.

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!