Construction Of Dumai-Sei Mangkei Gas Pipes Can Save Elpiji Subsidies Of Up To IDR 420 Billion Per Year

Illustration (Photo: Doc. ANTARA)

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) through the Directorate of Planning and Development of Oil and Gas Infrastructure plans to build gas pipeline infrastructure from Dumai to Sei Mangkei (Dusem) which is expected to connect natural gas distribution between Sumatra Island and Java Island.

Dusem transmission pipeline was originally planned to be built along 428 km, in its development to 555 km with funding sources from the State Revenue and Expenditure Budget (APBN) with a total investment of IDR 7.8 trillion.

Coordinator of Infrastructure Planning for Oil and Gas ESDM Sugiarto explained that the urgency of the construction of the Dusem transmission pipeline will be the key to the integration of gas pipelines throughout Sumatra and the integration of Sumatra-Java (with the construction of Cisem Phase II), and can channel the potential of natural gas from WK Andaman Aceh to be utilized in Sumatra and Java.

"The construction of Dusem is very, very important and there is also an urgency why it must be built immediately, the government has come down to carry out the project because it is the key to the integration of gas pipelines from Sumatra to Java," he told reporters, Friday, June 21.

In addition to this urgency, Sugiarto explained that the benefits of the construction of the Dusem transmission pipeline are to support more affordable gas prices, reduce 3 kg LPG subsidies by Rp420 billion per year, save costs of Rp107 billion per year, save foreign exchange of Rp720 billion per year, to potential state revenues of Rp1.89 trillion per year from upstream oil and gas and Rp12 billion per year from BPH Migas contributions.

Sugiarto said that the approach strategy for providing Indonesian natural gas infrastructure was divided into West and East Indonesia, where in Western Indonesia it relied on the connectivity of piped gas and Eastern Indonesia through the Virtual Pipeline, using ship-based LNG transportation modes. This is done with consideration of geographical factors and needs between the Western and East regions.

"Last year we managed to complete the Cisem Phase I pipe, this year we will continue to Cisem Phase II. For Dusem, it is planned that construction will start next year so that it is hoped that the interconnection of transmission pipes from Aceh and East Java can be realized soon," said Sugiarto.

Sugiarto explained that the construction of the Dusem pipeline has a legal basis listed in the regulations and is included in the National Strategic Project.

Currently, his party is compiling documents and planning for the feasibility study that has been carried out by Lemigas and is included in the initial draft in collaboration with universities, while for Detail Engineering, Procurement and Constructions is expected to be completed by the end of this year.