Govt promises to prioritize domestic gas market

Energy and Mineral Resources Minister Darwin Zahedy Saleh said the distribution of natural gas for domestic consumption would proceed according to earlier government promises.

?In principle, the government will ensure gas supply for all consumers, but since our natural gas potential hasn?t been explored optimally, we need to prioritize distribution,? he was quoted by The Jakarta Post as saying on Friday.

The government had announced that natural gas for domestic consumptions would be used to secure energy supplies first before other purposes.

?The consumner we?ve high-lighted as top priority is [state power monopoly] PT PLN,? Darwin said.

Gas supply to power plants, he said, was a key government concern as it would affect the price of electricity across the nation, including for industry. In the industrial sector, the government prioritized gas supply to the fertilizer industry to secure gas supply for its vital position in ensuring the availability of food in the country; he added.

?Currently, power plants and the fertilizer industry consume 50 percent of the domestic gas supply,? he said.

To support the distribution, the government initiated several infrastructure development projects such as building a re-gasification terminal in West Java and North Sumatra, the Bojanegara-Serpong distribution channel in Banten province, a compressed natural gas station and a distribution network in Medan, North Sumatra.

The Energy and Mineral Resources Ministry said 50.3 percent of Indonesia?s total gas production in 2010 went to the domestic market, while the rest was exported.

It said the largest gas consumers in the country were power plants with 11 percent of total consumption, followed by the fertilizer industry (7.8 percent). PLN said its gas consumption last year reached 775 million metric standard cubic feet per day.

In the last five years, gas consumption has surged as PLN and other industries affirmed commitments to reducing the use of oil based fuels.

However, poor infrastructure has long dogged Indonesia?s industrial sector. Many investors have cancelled plans to open businesses in the country due to uncertain gas supply. (*)