Publications

Indonesia is endowed with substantial natural gas reserves of which about 20 TCF can be classified as ",non-exportable",. A major problem with the utilization of these gas reserves is that the majority of the reserves are located away from the major population and manufacturing centers. Historically, gas transmission facilities have been developed on an ad hoc basis, considering specific customers and specific gas reserves. PGN has embarked on a program to develop an integrated gas transmission system which will serve the strategic interest of Indonesia.PGN has evolved from being the operator of isolated town gas systems, based on naphtha conversion, to being a developer of gas demand - selling and transporting nearly 300 MMCFD in 1996. From this operating base and with the experience we have gained, PGN plans to develop a national transmission system. One of the major purposes of this effort will be to fulfill the national energy policy of substituting non-exportable fuels for oil and liquid fuels used in the domestic market.In the development of this system, PGN plans to multiply its efforts through the use of the capital and experience of foreign investors The Government and PGN has taken a number of steps to accomplish this program such as the recent change of PGN's status to Persero and the retaining of a financial advisor to screen potential investors An additional measure to facilitate the development of the gas market will be the establishment of a gas regulatory framework to promote competition, increase transparency and improve economic efficiency.PGN's near term efforts will be focused on the construction and operation of the Asamera to DuriIBatam pipeline, the South Sumatra to West Java pipeline, an expansion of existing facilities in West Java and the development of a pipeline in South Sulawesi. For the longer terni, PGN will investigate the integration of the existing Java pipeline systems with other strategic connections of the major production areas and the major consumption areas.The development of the approximately 5000 kilometer system envisioned by PGN could cost as much as $ 5 billion. To reduce the financial burden on the Government, and build on this economic opportunity identified and confinned by PGN, as demonstrated by PGN's tenfold growth since its first prqject in 1987, PGN will seek the technical assistance of the most experieiiccd companies in the world. This plan will promote the utilization of Indonesian assets, help fulfill the objectives of the National Energy Policy and support the economic growth of Indonesia through providing competitively valued fuel to industrial, commercial and residential users over the next two decades. Further. this system will provide the basis for even greater savings and opportunities for future generations as Indonesia continues to grow in the 21st century.