Government Projects Downstream Oil And Gas Investment To Grow Every Year

PHOTO VIA ANTARA

JAKARTA - The government projects that the downstream oil and gas (oil and gas) industry will continue to increase every year in line with the development of the oil and gas industry in Indonesia.

"Downstream oil and gas investment will continue to grow until 2024. This is certainly an opportunity for oil and gas stakeholders to be involved in downstream oil and gas," said the Coordinator of Oil and Gas Processing of the Ministry of Energy and Mineral Resources, Muhidin in a written statement quoted by Antara, Sunday, November 21.

The government estimates that downstream oil and gas investment in 2021 will reach US$ 4.4 billion and in 2022 it will reach US$ 9.181 billion. Then, investment in 2023 is estimated at 11.22 billion US dollars and investment in 2024 will reach 10.77 billion US dollars.

Muhidin said that the realization of downstream oil and gas investment until the third quarter of this year was still dominated by the oil and gas transportation sector of US$1.176 billion. Furthermore, investment in the fields of processing, storage, and commerce.

A number of promising downstream oil and gas projects, including oil refinery and petrochemical projects which are currently underway and are expected to be completed from 2022 to 2027.

Investment in five projects to increase the capacity of existing refineries and one new oil refinery is estimated at 43 billion US dollars. The total capacity after all these projects are on stream is 1.4 million barrels per day and the production of fuel products is 1.2 million barrels per day.

"These oil refineries will produce fuel products that are environmentally friendly with EURO V standards. Currently, from existing refineries, the fuel produced is EURO II standard," explained Muhidin.

The government is also reviewing the use of dimethyl ether as a substitute for LPG, the majority of which are currently imported. The dimethyl ether product will be used for the Sumatra region.

Another project is the use of 30 percent biodiesel to reduce fuel imports. The implementation for this year has set 20 BBM Business Entities and 22 BBN Business Entities with a FAME allocation of 9.2 million kiloliters with 82 delivery points.

The mandatory 30 percent biodiesel is estimated to save the state money of US$ 2.98 billion.

The government also continues to increase the use of natural gas through the construction of a natural gas network for households.

Throughout 2020, the government has built 696,011 house connections with 76.9 percent or 535,555 house connections built through APBN funds spread across 17 provinces, 53 regencies/cities.

In addition, the government has assigned PLN and Pertamina to convert the use of fuel into natural gas for power generation in 52 power plants owned by PLN.