Pertamina to build two new LPG plants as RI relies on import

State-owned oil and gas firm PT Pertamina plans to develop two small-scale LPG plants in South Sumatra and East Java this year with a combined investment of US$200 million to expand its production capacity as the country continues to rely on import, Investor Daily reported on Tuesday.

Pertamina Director of Gas Hari Karyuliarto said that the LPG plant in South Sumatra will process gas from the Jambi Merang field, while the plant in East Java will process gas from Block West Madura Offshore.

Pertamina?s LPG production has been on a declining trend during the past couple of years from 804,533 metric tons in 2011 to 728,356 tons in 2011 and 508,069 million tons last year. This year, production is expected to rise to 887,572 metric tons

Meanwhile, Vice Minister of Energy and Mineral Resources, Susilo Siswoutomo said that the country cannot stop its huge LPG import due to limited domestic production and huge demand.

He said the country?s LPG production has been limited because of the limited number of gas fields containing the required propane (C-3) and butane (C-4) types of gas which are required in the LPG production.

?Even if we boost national gas production, it would not (be able to reduce) import (of LPG) because of the limited raw materials,? Susilo was quoted by Bisnis Indonesia daily Tuesday as saying. ?LPG import currently accounts for about 60 percent of total consumption,? he added.

On the other hand, household consumption has been huge due to the limited gas pipeline facility. To help resolve the problem, Susilo said that the urban gas pipeline network in areas close to gas sources must be expanded to help reduce LPG import.

The paper said that this year, the government plans to connect 20,000 households to gas pipeline network. Meanwhile, state-controlled gas distribution firm PGN has set a target to connect 1 million households.

According to data from state-owned oil and gas firm PT Pertamina, the country?s LPG import rose from 2.05 million metric tons in 2011 to 2.71 million in 2012 and 2.43 million tons last year. This year, LPG import volume is estimated to further increase to 2.82 million metric tons. (*)