Utilization of Natural Gas is intensified

Utilization of Natural Gas is intensified

Natural Gas. Vice President KH Ma'ruf Amin encouraged the development of natural gas to meet national energy needs. According to him, natural gas has a vital role in the energy mix policy in Indonesia.

The Vice President said natural gas is the cleanest fossil energy and is widely used after oil and coal. "Therefore, the government continues to encourage the use of domestic natural gas by stimulating the domestic industry," said Ma'ruf when inaugurating the national strategic project Jambaran Tiung Biru (JBT) and the MDA and MBH Gas Field Projects in Surabaya, East Java, Wednesday (8/ 2).

Ma'ruf said that the upstream oil and gas sector still plays a strategic role, both for state revenues and as a driving force for the national economy. He said, in 2022 upstream oil and gas business activities contributed more than 42 percent to natural resource-based non-tax state revenue (PNBP). The achievement of oil and gas PNBP was recorded at IDR 148.7 trillion, exceeding the initial target of IDR 139.1 trillion.

In contrast to the declining percentage of oil and coal utilization as energy, the use of natural gas is actually increasing. "This shows the vital role of natural gas, both in meeting national energy needs and in Indonesia's energy mix policy," he said.

Therefore, he supports the development of the Jambaran Tiung Biru Gas Unitization Field and the MDA and MBH Gas Fields which were inaugurated on Wednesday (8/2). He hopes that the two national strategic projects (PSN) will supply Java's large demand for gas.

According to the Vice President, the multiplier effect from the two gas fields will be driven by the supply of gas to PT PLN and various industries around Central Java and East Java Provinces. "It is hoped that meeting the demand for gas will spur the business world's enthusiasm which will lead to progress in the people's economy, at the regional as well as national level," he said.

Ma'ruf also appreciated the successful development of these two projects which were able to increase the national gas supply by 312 million standard cubic feet per day. The two projects are projected to contribute up to Rp. 37.2 trillion in state revenues during the project period.

"I ask that the operation of the two projects be carried out properly by paying attention to health, safety, security and environmental aspects. Prioritizing gas supply to meet domestic demand," he said.

The development of natural gas has recently been intensified. PT Pertamina Gas Negara Tbk (PGN) hopes that the government can provide cheaper gas prices from upstream oil and gas so that the utilization of natural gas will increase.

This request was submitted by PGN to the DPR in a meeting with the DPR's Commission VII earlier this month. The cheaper gas price from upstream is expected to accelerate the target of 1 million household gas networks (jargas) which can reduce dependence on imported LPG.

PGN Main Director Muhammad Haryo Yunianto explained, currently a total of 982 thousand households can build gas network connections. Last year, the State Budget did not budget for jargas, so PGN had to dig into the company's pocket to patch up additional jargas in 2022.

"Currently, from investment calculations, we are only able to build 400 thousand jargas. There are still 600 thousand more jargas that should be built," said Haryo.

One of the reasons why PGN was unable to increase its jargas capacity was because from an economic perspective, the price of upstream gas, which is still around US$6-7 per mmbtu, cannot be taken by PGN. "Because we have to be accountable for the return on investment. We ask for this to be able to support the price of upstream gas to a maximum of $4.72 per mmbtu. Because currently upstream gas is US$6-7 per mmbtu," said Haryo.

Haryo hopes that the government can allocate more state budget or cooperation schemes with the private sector as well as PPP schemes to be able to build household gas networks. Moreover, currently the supply of gas will continue to increase with the many gas field projects that will soon be onstream. With the existence of a market created, it will further encourage the utilization of domestic natural gas production.

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