T

o strengthen supplies to East Java, state gas distributor PT PGN has purchased 20 billion British thermal units (Btu) per day of natural gas from PT Indogas Kriya Dwiguna.

The purchase agreement was signed by PGN finance director M Riza Mochtar Pahlevi and Indogas president director Laksmini Devi on Friday. The contract will last two years.

The gas will come from the Terang Sirasun Batur field, which is operated by Kangean Energy, and be channeled through the East Java Gas Pipeline to the Waru receiving station in East Java.

“We hope that with this purchase, PGN can fulfill gas demand from industrial customers in East Java.
The province is in need for additional gas supplies to ensure the sustainability of the industries,” PGN corporate secretary Heri Yusup said in a statement sent to The Jakarta Post.

“Despite the additional gas supplies, we hope industries keep complying to the limit on gas consumption, as stipulated in the contracts with PGN,” he added.

According to the upstream oil and gas regulator, the Terang Sirasun Batur field will supply around 300 billion Btu per day to East Java, starting in April. The field also supplies gas to PT Pertamina Gas (Pertagas) and state electricity utility PT PLN.

“Signing the agreement with Indogas is the best way that our company can fulfill industries’ energy needs this year. PGN will also seek other sources to strengthen our supply,” Heri said.

Gas demand in East Java is estimated to reach 400 billion Btu per day, with 250 billion Btu per day
going to industries.

Currently, the province receives 110 billion Btu per day of its gas supply from the Maleo field, operated by Australia-based company Santos.

Industries in East Java are facing difficulties in obtaining sufficient gas supplies due to a shutdown at the Maleo field for maintenance.

PGN expects that Santos can resume gas production at normal capacities so that the gas shortage can be solved as soon as possible.

PGN currently operates natural gas transmission and distribution pipelines spanning more than 5,900 kilometers. The company distributes natural gas to power plants, industries, commercial businesses (like restaurants, hotels and hospitals) and households nationwide.

In the first nine months of 2011, the company recorded a net profit of Rp 4.51 trillion (US$501.11 million). At the same time, PGN distributed 785 billion Btu per day of gas to customers, down from 821 billion Btu per day over the same period in 2010.

The company is working with state oil and gas firm PT Pertamina to build a floating storage and re-gasification unit (FSRU) in Jakarta Bay, West Java, which will start operating in April.

— JP/ Rangga D. Fadillah