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Jakarta Post

Cirebon-Semarang industrial gas pipe construction kicks off after 14-year delay

  • Norman Harsono
    Norman Harsono

    The Jakarta Post

Jakarta   /   Thu, February 6, 2020   /   09:00 am
Cirebon-Semarang industrial gas pipe construction kicks off after 14-year delay A worker checks a gas pipeline at Onshore Receiving Facilities (ORF) owned by state-owned company PT Pertamina Gas in Porong, Sidoarjo, East Java. The government expects to see lower flaring activities with the issuance of a new regulation. (Antara/Zabur Karuru)

State construction firm PT Rekayasa Industri has begun building a 255-kilometer pipeline that will supply gas for industries between Cirebon, West Java, and Semarang, Central Java.

Rekayasa Industri, known as Rekind, broke ground on the US$169.4 million project on Wednesday, 14 years after the company won a bid for the project in March 2006. The company had struggled to secure a reliable gas supplier but overcame the issue in partnership with oil and gas-related government agencies.

“There is a big industrial client potential in West Java and Central Java,” said Rekind president director Yanuar Budinorman on Wednesday, adding that the pipeline project was expected to “support the competitiveness of industries on Java Island”.

Building downstream gas infrastructure enables more households and industries to use Indonesia’s sizable gas reserves and it is very likely to become the country’s fuel of the future, replacing oil. Indonesia has a commitment to increase gas consumption to at least 22 percent of total energy consumption by 2025. Gas contributed 18 percent in 2018.

Rekind said in a statement that it aimed to charge a $0.36 per million British thermal units (mmbtu) toll fee for channeling gas, slightly higher than the national average fee of $0.35/mmbtu. The pipe is able to accommodate between 350 and 500 million metric standard cubic feet per day (mmscfd) of gas.

The Downstream Oil and Gas Regulatory Agency (BPH Migas), which sets national average toll fees and conducts pipe project bids, said it would next conduct a bid for a gas pipeline connecting Dumai in Riau and the Sei Mangkei Special Economic Zone in North Sumatra.

“We will also work on pipeline project bids forwarded by various companies for 193 regions,” said BPH Migas head Fanshurullah Asa.