PGN teams up with Muara Enim to develop CBM

State gas distribution firm PT Perusahaan Gas Negara (PGN) has signed a memorandum of understanding (MoU) with Muara Enim administration to manage and utilize coal-bed methane (CBM) and natural gas in Muara Enim regency, South Sumatra province.

The MoU was signed by PGN president director Sutikno and Muara Enim regent Kamaluddin Djinap on February 1, 2007.

"This is our effort to support the government policy encouraging companies to find new energy. Besides, this is one of PGN's strategic ways to develop PGN business in the future in an anticipation of natural gas shortage problem facing several areas in Indonesia. Currently, a feasibility study on CBM is under intensive study," PGN said in a statement released Tuesday.

Apart from raising regional revenue and pushing up local economic growth, the development of potential CBM will also enable the company to supply gas to several local power plants in South Sumatra.

PGN said the CBM potentials could be developed optimally with the presence of the South Sumatra - West Java (SSWJ) natural gas transmission pipeline network now under construction.

Regent Kalamuddin Djinap hailed the agreement, saying that Muara Enim needs full support from different parties in developing local economy.

If 60 percent of the potential CBM reserves in South Sumatra is developed, the output could be around one trillion cubic feet (TCF), he said. (godang)