Do Not More Think About BBM, It's Time for Government to Campaign Gas Use for Industry

INDUSTRY.co.id - Jakarta, the Government is asked not to focus too much on the provision of fuel oil (BBM) One Price across the country, but ignores the provision of environmentally friendly fuels such as gas for the community and industry.

Achmad Widjaja as a gas observer said the conversion of fuel to LPG gas 3 kilo grams (kg) which succeeded in the reign of Susilo Bambang Yudhoyono actually passed with the conversion of fuel to gas for industry by Jokowi government.

"This effort has not been a bright spot, the Ministry of Energy and Mineral Resources (ESDM) has not made a breakthrough, the government is more concerned with premium fuel and gasoline while the rest of the world has gone green and emissions programs are clearly targeted," said Achmad Widjaja Vice Chairman of the Standing Committee of Indonesian Chamber of Commerce and Industry (KADIN) for Upstream and Petrochemical Industries to INDUSTRY.co.id in Jakarta (30/12/2017).

According to him, Indonesia currently has abundant gas reserves compared to petroleum. Based on data from the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources, by January 2017, Indonesia's natural gas reserves totaled 144.06 trillion cubic feet (TCF), consisting of proven reserves of 101.22 TCF and potential of 42.84 TCF.

The reserves will be exhausted within 48 years, if the assumption of gas production rate per year reaches 3 TCF. However, that number is only 12.3 percent of the total estimated national gas reserves.

He suggested the government as soon as possible to stop imports of fuel, especially diesel, for all national industries into the arena go green matching with the world program. "Solar is better exported for foreign exchange countries," he said.

Furthermore, he said, the government must provide certainty and clarity and firmness about energy in the field of natural gas and liquefied natural gas for industry, including the obligation of gas usage by power plants. It aims to enable the national industry to engage in long-term plans. "Currently all in the short term corridor hit and run so there is no I competitiveness," he said.

According to the man who is often called AW, the establishment of holding BUMN Oil and Gas is the right momentum for the government to focus on implementing the conversion of fuel to gas for industry. Moreover, the utilization of natural gas to meet domestic demand continues to rise since 2013.

Rising domestic gas demand and declining export gas export commitments are responsible for higher gas utilization in the country since 20132015, domestic gas utilization growth of 9%.

Based on data from SKK Oil and Gas as of June 2017, the trend of gas exports is now lower compared to 2010 and 2011. In 2010, the export proportion is still 4,336 billion British thermal units per day (BBtud) and domestic is 3,379 BBtud. In 2011, despite the smaller total distribution volume, the export portion is still dominant, which is 4,078 BBtud and domestic 3,276 BBtud. In 2012, the export and domestic exports are narrowed by 81 Bbtud with export details of 3,631 BBtud and domestic 3,550 BBtud.

The share of gas utilization for domestic needs is greater than that of export starting in 2013, namely domestic 3.703 BBtud and export of 3,402 BBtud. The increasing trend of domestic gas utilization is affected such as the regasification terminal of Nusantara Regas, the on-stream of several new gas fields.

From the consumer side, pipe gas users are dominated by industrial sector and electricity. From data of SKK Migas, industrial portion is 23,53% with contracted volume 1,758,1 BBtud and electricity 13,67% with contracted volume 1,158,4 BBtud.

Meanwhile, the Ministry of Industry projected gas demand for the industrial sector by 35 percent in 2018. The demand for gas will continue to increase as the projected growth of non-oil and gas manufacturing industry by 5.67 percent next year.

Secretary General of the Ministry of Industry, Haris Munandar, said that the contribution of gas demand to the industrial sector last year reached more than 30 percent compared to the overall energy needs. Gas becomes a commodity that many industries need to supply energy as well as raw materials.

Although the industry needs large amounts of gas, some areas are still experiencing problems with less gas supply. "We are looking for other options, one of them from several chains, cut or reduced costs," he explained.

The industrial sector absorbs 30.88 of the nation's total energy demand. Of that amount, 70 percent is consumed by energy-savvy industries, such as fertilizers and petrochemicals, pulp and paper, textiles and textile products, cement, steel, ceramics, palm oil, and food and beverages.

In 2016 the energy needs of the industrial sector reach 420.35 million barrel oil equivalent (SBM). Of this amount, gas accounted for 142.07 million BOE or 33.79 percent of the total demand, while the need for coal amounted to 169.64 million BOE or 40.35 percent.

In MMBtu, this year, it is estimated that industrial gas demand is at 829,338.2 MMBtu and is projected to rise to 867,071 MMBtu by 2018. The fertilizer, chemical and rubber goods industries become the biggest sectors absorbing gas and followed by the cement industry and minerals nonmetal.