Published on 16/10/2024 at 08:29 GMT+7 Reading time
State-owned gas distribution company PT Perusahaan Gas Negara (PGN) is nearing the finalization of the initial design phase for the Tegal-Cilacap distribution pipeline project, a company executive says.
"The outcome of the Front-End Engineering Design (FEED) will determine the project's future. We will make the go or no-go decision after the FEED is completed," PGN's Director of Strategy and Business Development, Rosa Permata Sari, said on Monday, October 14, 2024.
The Tegal-Cilacap distribution pipeline is a branch of the Cirebon-Semarang (Cisem) Phase II transmission pipeline, extending southward. The estimated investment for the project is around US$100 million (Rp1.55 trillion).
Rosa expressed optimism that natural gas from East Java will eventually flow to Pertamina's Refinery Unit IV in Cilacap through this pipeline, which will create significant cost efficiencies for the refinery.
"It is expected that the pipeline will be operational by late 2025 or early 2026," she said.
The Ministry of Energy and Mineral Resources (ESDM) has earlier indicated that the project could be included in the National Strategic Projects (PSN).
Director of Planning and Infrastructure Development at the ESDM ministry, Laode Sulaeman, emphasized the importance of aligning the pipeline's construction with Cisem Phase II, which is also a PSN project.
"The hope is that both pipelines are completed simultaneously, so once Cisem II is finished, gas can flow to Cilacap through the distribution pipeline," Laode said on September 30, 2024.
Separately, PT Pertamina Gas (Pertagas) President Director Gamal Imam Santoso confirmed that the company is planning the Tegal-Cilacap pipeline construction, utilizing the Cisem II pipeline for gas transport.
"We are planning to use the Cisem II pipeline for the Tegal-Cilacap route and have submitted requests for permits to the ESDM ministry," Gamal said.
However, he noted that the permitting process is complex, as it involves multiple ministries, including the Ministry of Public Works and Housing (PUPR) and the Ministry of Environment and Forestry (LHK).
Both Laode and Gamal stressed the need for the project to be classified as a PSN, as this designation would expedite the approval and construction processes.
"The assignment for this project falls under the authority of the Downstream Oil and Gas Regulatory Agency, while the installation of the pipeline is overseen by the LHK and PUPR ministries," Gamal said.
He added that the pipeline has long been planned to ensure the Cilacap Refinery can switch from burning raw materials, including LPG, to using natural gas as feedstock.
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