Friday, 03 April 2020 | 14:32 WIB

BPH Migas to Push for Gas Network Developments to Supress Oil-Gas Trade Deficit

BPH Migas to Push for Gas Network Developments to Supress Oil-Gas Trade Deficit (special)

JAKARTA, NETRALNEWS.COM - The Downstream Oil and Gas Regulatory Agency (BPH Migas) has mapped out strategies and priority steps to face the challenges of the oil and gas trade balance deficit next year. This effort will be made as part of efforts to strengthen the downstream oil and gas policy to become more targeted.

First, BPG Migas will increase the construction of gas networks, which will encourage domestic gas utilization, and while at the same time cutting Liquified Petroleum Gas (LPG) gas imports. Moreover, the construction of gas networks is considered as more affordable.

"BPH Migas is ready to oversee [construction] of gas networks to help to make gas [usage] more independent. Yes, maybe up to 10 million gas networks, and help reduce imports. BPH Migas is ready to always provide competitive prices," said Head of BPH Migas Fansurullah Asa in Jakarta, on Friday (11/22/2019).

Based on BPH Migas's records, LPG gas imports have so far reached IDR85 trillion per year. The figure comprises of IDR35 trillion from Pertamina, and IDR50 trillion from the State Budget (APBN).

In total, in just five years, there was IDR426 trillion just for LPG imports. Fansurullah said that naturally, the government needed to devise a strategy to utilize gas for domestic purposes.

"If we can save this, we do not need to import LPG, we use a lot of gas networks as there are plenty of resources. Thus, the oil and gas balance deficit will decrease," he said.

By the end of 2019, it is expected that 404,139 gas network house connections will be developed. Through state budget financing, the gas networks are developed in 18 locations namely North Aceh Regency, Dumai City, Jambi City, Palembang City, Depok City, Bekasi City, Karawang Regency, Purwakarta Regency, Cirebon Regency, Bojonegoro Regency, Lamongan Regency, Mojokerto Regency, Mojokerto City, Pasuruan Regency, Probolinggo Regency, Kutai Kertanegara Regency, Wajo Regency and Banggai Regency.

The Indonesian government also plans to build a similar program in 2020, with a total of 293,533 household connections in 16 provinces, including Aceh, North Sumatra, Riau, Jambi, Riau Islands, South Sumatra, Lampung, Banten, Jakarta, West Java, Central Java, East Java, East Kalimantan, North Kalimantan, Central Sulawesi and South Sulawesi.

Secondly, BPH Migas will immediately complete 294 gas Distribution Network Areas (WJD) from 21 business entities that will be auctioned after the revision of National Gas Network Master Plan (RIJGBN) is complete.

The WJD program will cut infrastructure investment costs from the state budget, as it will be fully borne by the company that submitted the WJD proposal.

Later, after the business entity has special WJD rights, the business entity will be given the rights of the Specific Commercial Area (WNT) for 30 years in the same area as the distribution area, as well as the gas allocation according to the proposed plan in the tender document and the availability of natural gas supply.

"We ask that later WJD holders no longer use diesel fuel, but use natural gas," said Fansurullah.

Third, optimize the use of natural gas-fueled transportation in Indonesia. Fansurullah said that according to BPH Migas calculations, the price of Liquefied Natural Gas (LNG) for motor vehicles is in the range of IDR6,000. "If this becomes a national policy, it will be extraordinary," he explained.

Fansurullah was not worried about the readiness of LNG-fueled transportation technology because some countries have also implemented it, such as India and China which already have LNG trucks. "There is no need for another regasification," Fansurullah said.

He continued that if all these steps go well, it will slowly help to overcome the gas trade balance deficit. "This will have added value in overcoming the gas trade balance," Fansurullah added.