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Friday, June 30, 2017

PGN seeks higher role in law revision



State-owned gas company PT Perusahaan Gas Negara (PGN) is seeking a greater role in national gas planning to expedite the development of gas infrastructures nationwide and centralize downstream gas business activities in the country.

During a recent closed hearing with the House of Representatives’ Legislation Body (Baleg), it discussed the formulation of a national gas procurement plan (RPGN) as part of an ongoing deliberation of the 2001 Oil and Gas Law revision. 

“We just wanted a clear direction on the infrastructure development. For instance, if the government wants to develop an industrial park, it should ideally be located near existing gas networks, hence the ensuing efficiency” PGN president director Jobi Triananda Hasjim said.

According to documents seen by The Jakarta Post, the RPGN will comprise two parts a national gas infrastructure plan and anational gas balance and the plan will be proposed annually by PGN, as a national gas company, to the Energy and Mineral Resources Ministry.

However, if PGN is unable to carry out the gas infrastructure development as ,laid out in the plan, the government can offer the work to other parties through a tender.

PGN also proposed during the hearing to be the gas aggregator to coordinate all gas supplies, whether from domestic production or imports, and sell it at an aggregate price to customers.

It also sought the authority to import gas Whenever local supply is insufficient to meet demand. The government recently launched the 2016-2030 road map for gas infrastructure development, which is estimated to have a total investment value of US$48.2 billion.

According to the road map, $25.6 billion will be needed for liquefaction, $12 billion for pipeline development and $6.1 billion for regasification.

Moreover, $2.2 billion will be used to establish gas networks, $1.93 billion for gas stations and compressed natural gas (CNG) facilities and around $400 million for liquefied petroleum gas (LPG) processing and distribution facilities.

The Energy and Mineral Resources Ministerial Regulation No. 6/2016 stipulates that gas supply should be prioritized for the transportation sector, house holds and small customers.

Next on the priority list is support for oil and gas production, followed by support for the fertilizer industry, gas based industry electricity procurement and gas fueled industry

“We can help manage gas allocation for these sectors by coordinating With stakeholders such as [state energy firms] Pertamina and PLN,” Jobi said.

PGN’s dominance in the gas distribution sector has so far been under scrutiny by the Business Competition Supervisory Commission(KPPU), which accused the firm of monopolistic practices that led to high gas prices at the consumer level.

The company’s Wish of a bigger role in the industry also comes in the wake ofthe government’s plan to establish six state holding companies, including in the oil and gas sector.

If it succeeds with the plan, the government Will transfer its assets Within PGN to Pertamina. Pertamina Will then act as the oil and gas holding company While PGN will run as a subsidiary.

The measure is expected to create synergy between PGN and Pertagas, which is Pertamina’s own gas unit. PGN director Dilo Seno Widagdo previously voiced optimism that the merger of the two companies would increase their investment capacity in the gas sector to up to $33 billion for the next 14 years.

Jakarta Post, Page-11, Friday, June 30, 2017

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