Arun-Belawan pipeline project 15% complete

By Godang Sitompul

The giant gas pipeline project linking two provinces Nangroe Aceh Darussalam and North Sumatra has been running smoothly, with 15 percent of the works having been completed, state owned oil and gas firm PT Pertamina, the owner of the project, said on Monday.

Hari Karyuliarto, Director of Gas and Power at Pertamina, told Petromindo.com that the firm is now busy appropriating lands for the project and bringing pipes to the location.

The 350-km pipeline project aims to channel gas from the Arun LNG plant in Aceh to PLTGU Belawan combined cycle power plant in North Sumatra owned by state owned electricity firm PT Perusahaan Listrik Negara (PLN), past industrial estates in North Sumatra.

?Generally, the project has been running smoothly. We are bringing pipes to the location and finishing land appropriation, which has been 15 percent complete, or around 3 percent faster than the scheduling plan,? he said.

Basically, he said, the firm faced not obstacles, while noting land appropriation is not an easy job. Public and governments in North Sumatra and Aceh are also very supportive of the project, he said.

He noted that Pertamina is mulling options to import LNG for the Arun LNG plant. The plant was to be a major LNG producer in Indonesia but Pertamina is modifying the plant into a regassification facility as there isn?t much gas left in Aceh to be processed into LNG at the plant.

Pertamina expects to supply gas not only to PLTGU Belawan, which is the main supplier of power to North Sumatra, but also to industrial parks in the province. But, it has thus far only secured an agreement with PLN.

?We have signed a Heads of Agreement (HoA) with PLN. The LNG belongs to PLN and the firm pays toll fee which has been agreed upon. However, only Memorandums of Understanding (MoU) have been signed with industrial buyers. We are still unable to negotiate (with the industrial buyers) on prices and others because it remains unclear where we shall get the LNG from,? he said.

The industrial buyers are Medan Industrial Park in Medan, which has been operating since 1988 and the Sei Mengkei Special Economic Zone in Simalungun, which is being developed by state owned plantation firm PT Perkebunan Nusantara III and is expected to start operation in 2015.

Hari earlier said that both industrial parks, which will be the anchor buyers for the Arun-Belawan gas, will be supplied with 75 mmscfd of gas respectively or a total of 150 mmscfd.

Editing by Johannes Simbolon