SKK Migas encourages gas distribution with gas pipeline infrastructure transportation
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Kontan - SKK Migas dorong distribusi gas dengan transportasi infrstruktur pipa gas
21 June 2024
By Diki Mardiansyah
Kontan.co.id – Bandung. SKK Migas is pushing for the successful implementation of natural gas pipeline infrastructure to ensure efficient distribution of the existing gas supply throughout Indonesia.
Gas pipeline infrastructure is considered crucial for facilitating gas movement from east to west, and vice versa, through the Cirebon-Semarang (Cisem) and Dumai-Sei Mangke (Dusem) natural gas pipelines.
BPH Migas Coordinator of Account Setting, Tariffs, and Pricing of Natural Gas Idham Baridwan mentioned that tariffs for transporting natural gas through the pipeline network would be determined by BPH Migas. Meanwhile, upstream governance will be regulated by the government and SKK Migas.
Furthermore, Idham explained that distribution and commercial costs were regulated by the Directorate General of Oil and Gas based on Minister of Energy and Mineral Resources Regulation No. 58 of 2017 on the Sale Price of Natural Gas Transmitted by Pipelines in the Upstream Oil and Gas Business Activities.
Idham explained that BPH Migas' responsibility was to enhance the domestic utilisation of natural gas, which can be achieved by setting appropriate tariffs and prices for the natural gas network.
An increase in domestic natural gas utilisation can be optimised through modes of transportation with established tariffs. Currently, there are about 75 segments and 10 transporters. However, only 7 segments have been utilised above 60%, while the majority are below 45%.
"We may need to synergise from the upstream to determine the allocation and revise regulations on tariff stipulation procedures to ensure 100% capacity utilisation," Idham said during natural gas forum panel discussion in Bandung on Thursday (20/6).
Idham stated that they were currently drafting a regulation on reserve capacity to maximise pipeline utilisation. Moving forward, BPH Migas plans to regulate reserve capacity to open access for other pipeline operators.
According to Idham, the current utilisation rate of pipelines remains suboptimal. BPH Migas aims to regulate pipeline utilisation to enhance affordability and increase utilisation.
During the same occasion, President Director of Pertagas Gamal Imam Santoso expressed that Pertamina Group supported the integration of PPAs for technologies from Sumatra to West Java and East Java.
In the next phase, Gamal stated that they planned to connect Sumatra's currently unconnected pipeline segments, such as the transmission pipeline from Dumai to Semangke that has a diameter of 18-24 inches and a length of 428 km.
"Eventually, it will connect to existing areas, such as Medan Industrial Estate. Our target is to submit it to the government by 2027," Gamal said.
Gamal explained integrating all pipelines with Pertagas' support would enable gas distribution to be connected from East Java to West Java. Another benefit is that it allows for supply-demand interconnection between Sumatra and Java, facilitating operational flexibility.
Gamal detailed that connecting all pipelines from Sumatra to Java would be implemented in three stages. The first step, scheduled from 2020 to 2027, involves interconnecting all pipelines from Java to Sumatra.
The second step is integrating the gas, pipeline, and commercial schemes. The final step is achieving interoperability with the gas transport agreement, which will facilitate gas delivery and national transmission development.
Gamal hopes that Pertagas, as the operator of CISM that is owned by the Ministry of Energy and Mineral Resources, can support the integration of transmission pipelines from East Java to West Java to optimise gas distribution.
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