PGN plans to develop coalbed methane in South Sumatra

State owned gas distribution company PGN is studying a plan to develop coalbed methane (CBM) in South Sumatra in cooperation with major coal producer PT Tambang Batubara Bukit Asam (PTBA) and oil and gas company PT Medco E&P Indonesia, Investor Daily reported on Thursday.

PGN's president director WMP Simanjuntak said in Jakarta on Wednesday that the CBM project which was expected to produce about 180 trillion cubic feet (TFC) would be the first in Indonesia.

"The gas to be produced from the project would be distributed through PGN's pipelines," he said, adding PGN also planned to cooperate with other coal producers such as PT Kaltim Prima Coal in East Kalimantan to develop a similar project.

Simanjuntak said the development of CBD would be quite important to anticipate the decline in gas supply for a number of power plants in South Sumatra. The power plants in the province are estimated to suffer a shortage of gas supply after 2008.

According to data issued by the Asian Development Bank (ADB), the volume of the coal reserves which have methane content reaches 183 TCF. The World Bank even estimated that the coal reserves with methane content in Sumatra and Kalimantan could reach 453 TCF. (*)