Pertagas and PGN Embark on Construction of Duri-Dumai Gas Pipeline

Photo by MEMR

JAKARTA (TheInsiderStories)PT Pertamina Gas (Pertagas), a subsidiary of diversified state-owned energy company PT Pertamina and national gas distributor PT Pertamina Gas Tbk (IDX:PGAS) have officially started up construction of the 64 kilometers of gas pipeline linking Duri and Dumai.

The inauguration ceremony was held on Monday (13/11) at the Energy and Mineral Resources Ministry, and was attended by Deputy Minister for Energy and Mineral Resources Arcandra Tahar, Dumai Major, Top Executives of the Downstream Oil and Gas Agency (BPH Migas), Perusahaan Gas Negara, Pertamina and Pertagas.

The construction of the 24-inch gas pipeline is expected to be completed within the next 11 months, and commence operations by October 2018. The gas pipeline will deliver gas from Pertamina’s Dumai refinery to industry players, port  and petrochemical complex in Riau.

The gas pipeline will be developed starting from Duri Meter Station in Grissik-Duri (PT TGI) to Pertamina’s Refinery Unit II Dumai plant, supplied from Corridor Block, which is operated by ConocoPhillips, as well as Bentu Block (EMP), and Jambi Merang (JOB Pertamina-Talisman).

‘The construction and operation of the gas pipeline is a synergistic manifestation between state-owned companies Pertamina and PGN. In the end everyone will benefit. We always support innovation as long as it abides by all existing regulations,’ Archandra said.

The gas supply delivered to Dumai refinery will convert fuel oil based gasoline into gas, and gradually increase the refinery’s production from 57 million standard cubic feet per day (MMSCFD) to 120 MMSCFD.

The total cost to develop the pipeline is estimated to reach US$ 52.2 million, and will generate 400 new jobs during the construction period.

Jobi Triananda Hasjim, CEO of PGN, confirmed that the company is ready to establish a sufficient gas pipe infrastructure in the future, as mandated by the government. The company is also ready to collaborate with other SOEs, as shown in this gas pipe project that involves several SOEs, including PT Pertagas, PT Hutama Karya and PT PDC-Elnusa.

‘To achieve ideal (100 percent) national gas pipe infrastructure construction, we will require $21 billion. Thus far only 20 per cent has been constructed,’ he said.

At the same occasion, the Energy Ministry also witnessed 3 gas transportation and trade agreements, consisting of sales and purchase of gas from the Jambaran-Tiung Biru field, involving Pertamina EP Cepu, Pertamina EP and parent firm Pertamina and a Firm Gas Transportation Agreement (FGTA) for Duri-Dumai from Grissik in South Sumatra to Duri in Riau, involving PT TGI and PT PGN.

‘Other SOE synergy includes PJBG Jambaran-Tiung Biru project, arranged between Pertamina and PLN, in which both sides agree on a fixed gas price of US$ 7.6 per MMBTU flat for 30 years,’ Arcandra added.

Both PGN and Pertagas are now embarking on developing gas pipeline networks – for both transmission and distribution – in the effort to increase the utilization of domestic gas by domestic consumers. (*)


Written by Yosi Winosa, email :