Support Energy Transition, BPH Migas Will Auction 72 WK Gas Distribution Network

Illustration of the gas network (Photo; Doc. Antara)

JAKARTA - Member of the Committee of the Downstream Oil and Gas Regulatory Agency (BPH Migas) Saleh Abdurrahman revealed that this year his party will conduct an auction of 72 natural gas distribution network working areas (WJD).

Saleh revealed that natural gas has an important role as a supporter of the energy transition to support the use of clean energy. Inevitably, because of this strategic role, natural gas is declared to be entering its golden age.

The advantage of natural gas is that it contains lower carbon emissions when compared to other fossil energy. For this reason, Saleh emphasized that natural gas needs more massive development and utilization.

"Among other things, through the gradual auction mechanism for the Distribution Network Area (WJD) and the development of household gas networks and small customers," he told the media in Bandung, quoted Monday, May 22.

The Decree of the Minister of Energy and Mineral Resources Number 10 of 2023 concerning the Main Plan for the National Natural Gas Transmission and Distribution Network (RIJTDGBN) for 2022-2031 also mandates the WJD auction.

"The WJD auction will pay attention to the availability and adequacy of natural gas supply, commitment of business entities, planning and infrastructure, as well as management costs," he explained.

Saleh further added that if the urgency of natural gas management is integrated through the distribution network area, there are several goals, including opening opportunities and guaranteeing investment returns for infrastructure development, especially in new areas that have a fairly high margin of cost, secondly reducing the disparity of infrastructure costs between regions or between customer segments so that they can maintain customer purchasing power, thirdly, natural gas processing governance through pipes is more effective and efficient in a structured and integrated manner.

Just so you know, later the business entity (BU) that owns WJD will be given a certain Commercial Area, the area of which is the same as the Distribution Network Area with 30 years of exclusive rights for new WJD and 15 years for existing WJD.

"Later on, Mrs. WJD owners will be given an allocation of Natural Gas in accordance with the proposed planning in the auction document and the availability of natural gas supply," said Saleh.

Saleh said that the development and use of integrated natural gas requires support from various parties. "We believe that the development of natural gas in the future will be better," concluded Saleh.