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ertamina Gas, a subsidiary of state oil and gas firm PT Pertamina, plans to build a new pipeline network connecting Cirebon and Muara Karang in Jakarta in a bid to cope with the gas shortfall problems in the province.

The company’s director for planning, development and sales, Harjana Kordiat, said the planned pipeline network would be divided into two segments — a 90-kilometer pipeline from Cirebon to Kandanghaur and a 50-kilometer pipeline from Tegal Gede to Muara Tawar.

“Currently, we’re still conducting a feasibility study to observe the planned network’s technical and commercial aspects. We expect the study to be completed next year, while the engineering, procurement and construction processes are estimated to kick off in 2013,” he told reporters after a focus group discussion session in Jakarta on Tuesday.

To build the planned pipeline, the company would need to invest around US$200 million, he continued. He added that the funds would come both from Pertamina Gas’ internal budget and loans from financial institutions.

The pipeline network would gain gas supply from a liquefied natural gas (LNG) receiving terminal in Central Java that would be constructed by Pertamina, Harjana revealed. However, he said the price for the gas had not been decided since gas supply for the terminal had not been determined yet.

Amid soaring global oil prices, the Indonesian government has been committed to boost the utilization of natural gas for domestic purposes. However, the efforts have been hindered by unavailability of proper gas storage, transmission and distribution infrastructure.

Vice President Boediono, since May 2010, has repeatedly expressed his commitment to shift the function of the country’s natural gas from a revenue source to a key driver of economic growth by allocating more gas to domestic industries and state electricity company PT PLN.

Oil and gas upstream regulator BPMigas’s data shows that in 2011, the natural gas allocation for the domestic market would reach 56.78 percent or 4,366 million standard cubic feet per day (mmscfd) from the total gas production of 7,688 mmscfd.

Last year the government allocated 50.18 percent or 4,342 mmscfd of the total production of 8,653 mmscfd for domestic use, including for state-owned electricity monopoly PT PLN and industrial companies.

During the focus group discussion, Evita Herawati Legowo, the Energy and Mineral Resources Ministry’s director general for oil and gas, said to optimize gas distribution for domestic users the country needed to build more floating storage and re-gasification units, small-scale LNG terminals, mini liquefied petroleum gas (LPG) plants, transmission and distribution pipeline networks, and infrastructure to distribute gas for households and transportation vehicles.

“We actually have the gas, but we can’t distribute it to users because we don’t have sufficient infrastructure,” she argued.

The ministry’s data reveals that the country has a total potential of 343 tcf of natural gas, 453 tcf of coal-bed methane and 543 tcf of shale gas.

“Seeing the potential, the future of our energy security lies in both conventional and unconventional gases,” said Evita.

The focus group discussion held by the ministry also agreed to formulate several working groups to accelerate the development of gas infrastructure in Indonesia.