Pemping pipeline to be completed in 2017

By Febry Silaban

The pipeline project to be built by IDX-listed state owned gas distributor PT Perusahaan Gas Negara Tbk (PGN) from the Pemping island offshore Natuna Island to the West Natuna Transportation System (WNTS) pipeline is expected to be completed in 2017.

?The pipeline will connect WNTS with Pemping and then (the pipeline system in) Batam. The project will play a very strategic role for the national energy resilience as gas from Natuna can be immediately channeled (to Indonesian territory),? Director General of Oil and Gas IGN Wiratmaja said.

In July, the government assigned PGN to develop the project, which has been left unrealized for years. Now, the government finds it urgent to develop the project in order to boost the development of oil and gas resources in Natuna to emphasize Indonesia?s sovereignty over Natuna Sea which China claims as part of its traditional fishing ground.

Wriatmaja said the pipeline will have a diameter of 16 inches. A pipeline of such size does not need compressor because the pressure inside is high enough.

?We already allocate 40-90 mmscfd of gas from Natna for PLN (state owned electricity firm PT Perusahaan Listrik Negara (Persero)) in Batam. The gas is expected to start flowing in 2017,? he said.

He said the gas will be sourced from Gajah Baru field in Block A Natuna PSC operated by British firm Premier Oil Plc. ?Once the pipeline has been completed, supply (from Gajah Baru) to Singapore will not be reduced as the field still has spare volume to be allocated for the domestic market,? he said.

At present, Wiratmaja said, many PSC contractors in Natuna channel all their gas to Singapore via WNTS pipeline. The 28-inch pipeline now channels 325 mmscfd of gas to Singapore, while the pipeline capacity is 430 mmscfd. Aside from WNTS, there is another pipeline owned by PT Transportasi Gas Indonesia (TGI), a subsidiary of PGN, that channels gas from Sumatra to Singapore via Batam.

Wiratmaja said in the past, prior to the appointment of PGN as the developer of the pipeline, the project was given to PLN and Premier, but they never realize it.

?PLN was only wiling to build the pipeline until its power plant in Tanjung Uncang in Batam. Thus, industries in Batam won?t be able to use the gas. As for Premier, since its contract (on Block A Natuna PSC) expires in 2028, the firm set a high toll fee because it needs to get return on its investment within a short period of time.

?We thus offered it to others who are willing to build the pipeline with open access scheme, including PGN. We thus assigned PGN to build the pipeline with open access scheme and toll fee to be determined by BPH Migas,? he said.

The distance between Pemping and WNTS is slightly above 5 km, he said.

Editing by Johannes Simbolon