govt steps up plan to turn households to lng

http://www.thejakartaglobe.com/business/govt-steps-up-plan-to-turn-households-to-natural-gas/433913

Households in more cities are set to receive natural gas deliveries from the government as its effort to shift people?s reliance on kerosene to gas continues.

Government distribution of natural gas to households, which started in 2009, is part of a plan to develop natural gas networks in a number of cities. It complements a larger plan started in 2007 to switch domestic and industrial oil users to gas.

Waryono Karno, secretary general at the Energy Ministry, said on Wednesday that 21,251 new customers would start receiving natural gas sent to their homes. The new locations are Bontang, East Kalimantan, Sengkang, South Sulawesi, and Depok and Bekasi in Greater Jakarta.

The government plans to add 11 more cities to the distribution area through 2014, including locations in Sumatra, Madura, Papua, West Java and Central Java.

As part of its plan to distribute 7,938 billion cubic feet of natural gas, Waryono said, the government has secured commitments from two gas producers ? Total E&P Indonesie, a unit of French oil and gas giant Total, and Energy Equity Epic, a local unit of Hong Kong-based Energy World Corporation ? as well as state-owned gas distributor Perusahaan Gas Negara.

Total E&P Indonesie will sell natural gas from the nearby Mahakam block to 4,000 customers in Bontang, while Energy Equity Epic will deliver to 4,000 customers in Sengkang as it operates gas fields in the area. PNG will sell natural gas to customers in Greater Jakarta.

?By our calculations, there are 40,577 households that have been receiving natural gas at their home since two years ago,? Waryono said.

In 2009, 6,100 households in Surabaya and Palembang, South Sumatra, started receiving natural gas shipments. The number of recipients has increased since then, with 13,000 more households in Tarakan, East Kalimantan, Bekasi, Depok and Sidoarjo, East Java, joining the distribution area last year.

Customers in Surabaya are serviced by Lapindo Brantas, while the people in Tarakan receive gas from Medco E&P Indonesia and those in Greater Jakarta receive shipments from state oil and gas company Pertamina and PNG.

The government wants to convert household use of kerosene into natural gas as oil-based fuel prices are increasing, adding pressure to fuel subsidies in the state budget. Subsidies are already under the spotlight because of increasing use of Pertamina?s subsidized Premium fuel.

The government set aside Rp 95.9 trillion ($11 billion) for fuel subsidies in its 2011 budget.