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Thursday, November 24, 2016

Strategic Bojonegara Refinery Megaproject to Secure Domestic Gas Supply


 

    The government must support the realization of an integrated energy terminal megaproject in Bojonegara, Serang Regency, Banten Province worth IDR 10 trillion. Given the existence of this project, which will be very strategic in securing supplies, the plan is to build it by the Kalla Group business unit, PT Bumi Sarana Migas (BSM) by involving Japanese companies and Pertamina as the off-taker.

the Kalla group's


    The government must indeed focus on making a comprehensive plan related to oil and gas infrastructure in Indonesia, both LNG receiving terminal and gas transmission and distribution pipelines, so with the Kalla group's plan to build this LNG Megaproject, it is good to meet the needs and national energy security in the future, which later requires. said infrastructure support, said Deputy Chairman for Energy and Oil and Gas of the Indonesian Chamber of Commerce and Industry, Bobby Gafur Umar.

    According to Bobby, the overall infrastructure development plan requires a budget of up to Rp.4,900 trillion. According to President Jokowi, the source of funding from the State Budget (APBN) is only able to finance Rp. 1,500 trillion, so the role of the private sector in infrastructure development, especially in the Oil and Gas sector, is very significant. 

    Apart from making comprehensive planning, according to him, the government should also prepare an incentive package, so that more investors are interested in investing, especially in the oil and gas sector.



    Based on Pertamina's data, West Java has experienced a gas deficit of 315 MMscfd in 2015. This figure is projected to increase threefold to 962 MMscfd in 2025. Nationally, Indonesia is predicted to experience a gas deficit of 1,013 MMscfd in 2015. This deficit will increase to 3,206 MMscfd. by 2025.

    Economic and Energy Observer from UGM, Fahmy Radhi, who is also a former Oil and Gas Reform and Governance Team, stated that the construction of an LNG terminal is urgently needed in the future in order to maintain national energy security.

    According to him, Pertamina's role as an off-taker was appropriate because as a state-owned company representing the government, Pertamina had to play an active role. He acknowledged that the off-taker role carries a high level of risk. 

    However, it must be minimized with detailed and mature feasibility calculations, as well as supervision. Fahmy considered this project to be a profitable business, considering that in the future the demand for gas in Java, especially West Java, will continue to increase.

    98 Institute Executive Director Sayed Junaidi Rizaldi said the cooperation between Pertamina and BSM would improve Indonesia's ability to secure domestic gas supply, especially for the western part of Java. Sayed explained that the appointment of Pertamina as the only buyer (off-taker) of the refinery product indicates that the company can play an important role in the future supply of LNG gas.

    On the one hand, Sayed also hopes that Pertamina can become an operator in the mega project for the construction of an integrated energy refinery. The reason is simple, Pertamina is very experienced in managing refineries. All large-scale refineries in Indonesia are operated by Pertamina. 

    According to information, the integrated energy terminal complex will not only be filled by an LNG receiving terminal and regasification, a new oil refinery, and a PLTGU with a capacity of 1,000 MW to 2,000 MW. This mega project is expected to be operational in 2020, where the LNG receiving terminal facility can take place first. In the first phase, the LNG terminal capacity will be 500 MMscfd. However, the capacity will be enlarged to 1,000 MMscfd in the second phase.

Investor Daily, Page-9, Thursday, Nov 24, 2016

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