S

tate-owned gas distributor PT Perusahaan Gas Negara (PGN) has signed an agreement with contractor PT PGAS Solution for the construction of a 5.5 kilometer distribution pipeline at the Tambak Aji residential and industrial area in Semarang, Central Java.

Once the construction is completed, the pipeline will enable PGN to distribute natural gas to several factories in the Tambak Aji industrial area starting in August. As well as the factories, PGN will also distribute natural gas to households in the complex starting in November.

'€œThis proves that the government is serious in its efforts to convert the use of [oil-based] fuel to natural gas,'€ said PGN strategic business unit distribution region II general manager Wahyudi Anas after the signing of the contract in Mojokerto, East Java, on Tuesday.

The Rp 11 billion (US$948,000) project is the first in a series of pipeline projects that will connect several cities in the province.

The construction of the pipeline is in anticipation of an energy crisis, which has the potential to hit Central Java in 2017.

According to PGAS Solution president director Dilo Seno Widagdo, the company will build a compressed natural gas (CNG) clustering infrastructure '€” a supporting facility that will be connected to the distribution network.

The project is part of the effort to accelerate the government'€™s fuel conversion program, from oil-based fuels to natural gas in Central Java.

The natural gas will supply industrial plants, households and commercial customers with up to 710,000 cubic feet per day, or equal to about 600 kiloliters diesel usage per month.

'€œIt is predicted that the use of natural gas will reduce energy costs by up to Rp 50 billion per year,'€
Wahyudi said.

PGN has already launched a natural gas conversion-acceleration program in several areas in Jakarta with a mobile refuelling unit (MRU).

Meanwhile, according to PGN engineering and development director Djoko Saputro, Central Java is one of the areas lagging behind in the government'€™s initiative to convert fuel usage to natural gas. Djoko said that Central Java'€™s conversion had been delayed by more than eight years.

'€œWith the development of this infrastructure, it is hoped that we will be more self-sufficient in energy supply, because unlike [oil-based] fuels, natural gas is not imported,'€ Djoko claimed.

The network will be constructed in three stages: In the first stage, a pipeline will be built linking Kendal-Semarang-Demak; the second stage will link Semarang-Ungaran; and the last stage will link Pekalongan-Kudus-Solo Raya.

The government had earlier asked PGN to speed up the completion of the integrated natural gas infrastructure in Central Java.

'€œPGN is committed to its task of developing natural gas infrastructure in Indonesia, particularly in Central Java,'€ said Djoko.