The Ministry of Energy and Mineral Resources (ESDM) is currently evaluating the continuation of the Trans Kalimantan gas transmission pipeline project concerning the certainty of gas supply and current industrial absorption. The evaluation includes the stretch won by PT Bakrie & Brothers Tbk. (BNBR), from Bontang (East Kalimantan) to Takisung (South Kalimantan).

"It is currently in the evaluation process related to supply and demand, considering that, from the supply side, we are still awaiting the onstream of the IDD project," said Tutuka Ariadji, Director General of Oil and Gas at the Ministry of ESDM, on Tuesday.

Tutuka added that the demand for gas in Kalimantan has not shown a significant increasing trend. The current demand, he said, is already accommodated by the available downstream gas infrastructure.

Tutuka said ESDM still needed to comprehensively review the plan for the development of further transmission pipelines in the Kalimantan region, which is part of the master plan established by Minister of Energy and Mineral Resources Arifin Tasrif. "A comprehensive evaluation is needed, so we are cautious in building it," he said.

According to the Decree of the Head of Downstream Oil and Gas Regukatory Agency (BPH Migas) No. 042/Kpts/PL/BPH Migas/Kom/VII/2006, Bakrie & Brothers was designated as the winner of the Gas Transmission Special Rights Auction for the Kalimantan-Java Transmission Line (Kalija), divided into two phases to connect Kalimantan and Java.

Later on, the plan to build the transmission line to Java was scrapped and replaced with Trans Kalimantan. Through minutes of the meeting with BPH Migas on March 13, 2018, PT Bakrie & Brothers was found to be focusing on the construction of the gas pipeline stretch from Bontang, East Kalimantan, to Takisung in South Kalimantan or to the final gas consumer location to meet gas needs in Kalimantan. The Bontang-Banjarmasin gas pipeline route is 1,016.53 kilometers long.

Bakrie & Brothers projected an estimated demand for natural gas in South Kalimantan at around 97.25 MMScfd, followed by a demand for natural gas in East Kalimantan at about 306.72 MMScfd, and also a demand for natural gas in the Maloy Batuta Trans Kalimantan (MBTK) Special Economic Zone (KEK) of 34.80 MMScfd.

As for the projected market and natural gas demand in 2037, in South Kalimantan, the market is estimated to be 1,425 MMScfd, with a demand of 137 MMScfd. Meanwhile, in East Kalimantan, the market is around 2,212 MMScfd, with a demand of 212 MMScfd.

As previously reported, BPH Migas has yet to open the auction for 72 natural gas distribution network areas (WJD) from six routes that have been mapped so far. The uncertainty of gas supply from upstream is the reason why the downstream gas trade regulatory body has postponed the execution of the auction.

However, the auction of WJD is mandated as a follow-up to Minister of Energy and Mineral Resources Decree Number 10.K/MG.01/MEM.M/2023 concerning the National Gas Transmission and Distribution Network Master Plan for 2022-2031, established on January 12, 2023.

"If we conduct the WJD auction [now], the winner of the auction will have the right to allocate gas, which we cannot confirm yet because some projects are delayed in several locations," said Head of BPH Migas Erika Retnowati during the year-end press conference in Sentul on Dec. 30, 2023. Erika stated that the auction must be postponed until there is certainty about the gas supply from upstream for potential operators of distribution networks in several regions.