PLN gets first right to buy CBM

Government has decided that future production of coal-bed methane (CBM) gas will be prioritized to meet the need of state electricity firm PLN, a senior government official was quoted by Kompas.Com as saying on Friday.

The decision was made during a limited cabinet meeting headed by Vice President Boediono on Friday, Deputy Minister of State Enterprises Sahala Lumbangaol said, adding that industrial gas requirement would come second.

Indonesia is targeting to produce 500 MMCFD of CBM in 2015, ramping up to 1.5 BCFD in 2025, Director General of Oil and Gas Evita Legowo said as quoted by media.

Meanwhile, Kuntoro Mangkusubroto, Head of Presidential Delivery Unit Team said that government will prepare necessary rules to enable commercial utilization in 2011.

Indonesia is believed to have a huge potential of CBM that may reach 450 TCF and the government has awarded tens of CBM explorations licenses for contractors with more seen to come.(*)