Denpasar city, the capital of resort island Bali, has built a Liquefied Natural Gas (LNG) regasification project since 2021. It is part of the Investment Coordinating Board (BKPM)’s 47 national projects. The investment for the project is worth IDR 1.62 trillion.
Bali is an area of 5,780 square kilometers (sqm) and had a population of 4,317,404 in 2020. The province is famous for its tourism sector, boasting 246,504 tourists until July 2022 which grew 35.72% compared to the previous month. Bali offers 7 investment opportunities, 2 airports, 7 ports, 63 educational institutions, 224 hotels and 62 hospitals.
Denpasar is a hub for other islands and cities surrounding the island. The city has a total area of 127.78 sqkm. In 2020, the population reached 725,314 people, who mostly are Hindus with a percentage of 67.3%.
The BKPM is a government institution, established in 1973. Investment Minister Bahlil Lahadalia has chaired the board since 2021. The institution coordinates investment projects and implements investment regulations all across Indonesia.
LNG regasification facility
The LNG regasification facility is located in Benoa port, Denpasar. The port location is about 3 kilometers from the Pesanggaran Diesel & Gas Power Plant (PLTDG) and about 7.6km from I Gusti Ngurah Rai International Airport. Road infrastructures of Sanur bypass access and Bali-Mandara toll road area also available. The facility is close to the main Bali tourist objects, which are the main consumer targets for the Pesanggaran PLTDG and Bontang Gas refinery.
The project has an interest rate of return (IRR) of 13.86%, a net present value (NPV) of IDR 384.82 billion and a payback period of 11.67 years.
The project is known to be part of a Masterplan and Timeline project for the revitalization of Benoa port with an area of 5 hectares. It is located in the Bulk and Logistics Zone Development area or on the North side of Benoa port. The Benoa port, on the other hand, is a crucial port for PT Pelabuhan Indonesia (Pelindo), which operates the port as a supply distribution and logistics.
The purpose of the construction of the LNG in Benoa is to make the port the main gateway to receive natural gas in Bali. It will also successfully accomplish the Bali Green Province program by the provincial administration. The administration has required all hotels in Bali to convert from fossil fuels to gas fuel to ensure and maintain environmental sustainability in the province.
The provincial administration is also giving incentives to investors such as tax allowances and import facilities.
Natural disasters and challenges
According to Bali Spatial Planning, the province has a lot of small islands that are vulnerable to floods and tsunamis. From the topography of the island on rainfall, slope degree, river density, soil type, land usage, and altitude above sea level, the percentage of flood-prone areas, such as Denpasar, reaches 22.04%.
The Meteorology, Climatology, and Geophysics Agency (BMKG) said the La Nina was estimated to end in early 2023. However, the BMKG warned the public to pay attention to the possibility and magnitude of the occurrence of wet hydrometeorological disasters as well as the triple drip La Nina event, meaning the weather phenomenon occurred for three years straight.
