Govt announces ambitious household gas program. As the current account deficit is now estimated at around 3 percent of gross domestic product (GDP), the government has started to introduce policies and programs to skimp foreign exchange (forex) spending, particularly on energy, which has drained forex reserves.
The Energy and Mineral Resources Ministry, for example, has announced an ambitious program to expand the gas network for households, with a target of 4.7 million new connections between 2019 and 2024. The average expansion of new connections annually, however, stands between 70,000 and 80,000.
Energy and Mineral Resources Minister Ignasius Jonan said the policy would help reduce the consumption of liquid petroleum gas (LPG), recorded between 6.5 million and 6.7 million tons annually. Only 2.5 million tons was produced domestically, while the rest is imported.
Jonan said this year the government would develop gas networks for 78,000 households, but he wanted to multiply the number in to achieve 4.5 million new connections in 2024.
“I demand that the number is multiplied to 1 million connections so that the target of 4.5 million connections in 2024 can be achieved,” Jonan said when launching gas network infrastructure for households near As Shalafiyah Islamic boarding school in Pasuruan, East Java, recently.
Last year, he added, the government had developed gas networks for 89,000 households, 54,322 of which were implemented by state-owned gas subholding company PT Perusahaan Gas Negara (PGN).
“If households switch to natural gas that is in abundance in the country, this for sure will help reduce state spending on LPG imports.”
Pasuruan is the fifth city in East Java to have the household gas network after Surabaya, Sidoarjo, Mojokerto and Probolinggo. Pasuruan has 6,314 new gas network connections funded by money allocated in the 2018 state budget, said Jonan.
The gas is sold from Rp4,250 to Rp6,000 per cubic meter depending on its classification to households and other small scale consumers. Households could save up to Rp 20,000 per month if they shifted from LPG in 3-kilogram canisters to the gas distributed through the networks, the minister added.
PGN president director Gigih Prakoso Soewarto said the company was mapping the regions where household gas networks could be developed. The networks would be financed either by the state or through government-to-business (KPBU) schemes.
Previously, National Development Planning Minister and head of the National Development Planning Agency (Bappenas) Bambang Brodjonegoro said Bappenas categorized the KPBU, which are partnerships between the government and private companies or state-owned enterprises, into four schemes.
The Energy and Mineral Resources Ministry has assigned Husky-CNOOC Madura Limited (HCML) to supply gas to households that are connected to the network in Pasuruan. HCML supplied natural gas for projects in Mojokerto and Probolinggo in 2018.
“We are proud to be involved in the program,” HCML general manager Tilak Ranjith Kumar Nithiyeswaran said, adding that the total amount of gas that the company distributed to the three projects was 0.65 million cubic feet per day.
The gas is transmitted from BD gas field that has been in operation since July 2017. The field is located off the coast of the Madura Strait, 52 kilometers to the east of Pasuruan or 16 km to the south of Sampang regency on Madura Island. The field is estimated to have 442 billion cubic feet of gas reserves and 18.7 billion barrels of condensate. Govt announces ambitious household gas program ((bbn, Wahyoe Boediwardhana, The Jakarta Post)