Government-Business Entities Will Build Gas Jars in 12 Locations News – 40 minutes ago

Jakarta, CNBC Indonesia – The government, through the Ministry of Energy and Mineral Resources (ESDM), revealed that the government will build a natural gas distribution network for households (jargas) using the Government Business Entity/KPBU Cooperation scheme in 12 locations spread across Indonesia.

This is what the Director General of Oil and Gas (Dirjen Migas) of the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said. He said that his party was carrying out a pilot project in two regions, namely Palembang and Batam, which would later be developed from these two regions to 12 other regions.

“(Currently) there are nine regions, but it could be expanded to 12 (regions). Currently there are only two pilots, Batam and Palembang,” explained Tutuka to CNBC Indonesia in the Energy Corner program, Tuesday (17/10/2023).


Now the government is exploring collaboration with various institutions/agencies to formulate plans starting from market sounding, user surveys and consumer surveys.

“The planning is quite detailed and complex, starting from market sounding, user surveys, consumer surveys. How about where we are doing there is a pilot (project) in Batam and Palembang. It has been studied so far that it will be developed to 9 cities/districts,” he added.

In the future, in the next 2 years, the Jargas program with a cooperation scheme between the government and business entities could start running in 2025.

“So we are currently preparing through the Presidential Decree. Then there are other preparations until next year, so we hope that by 2025 (the PPP scheme) can be implemented,” he explained.

In fact, the government has made regulations governing Gas Jars as stated in Presidential Regulation (Perpres) Number 6 of 2019 concerning the Supply and Distribution of Natural Gas Through Natural Gas Transmission and/or Distribution Networks for Households and Small Customers.

However, he said that in this regulation there were no regulations regarding business entities that could collaborate with the government as currently planned.

“There are already regulations in the Presidential Decree, but the Presidential Decree does not include the PPP Jargas. PPP is a collaboration between the government and business entities that currently exists. Currently, it is the government or business entities,” he stressed.

As is known, the government is targeting the construction of a natural gas distribution network for households (jargas) to reach 2.5 million household connections (SR) by 2024. This number has decreased compared to the initial plan which was targeted at 4 million SR.

Minister of Energy and Mineral Resources, Arifin Tasrif, said that the reduction took into account the progress of gas pipeline construction that has been underway to date. So far, only around 800 thousand SR have been built.

“The government should have 4 million connections in 2024 but now it is still below 800 thousand because only the APBN and PGN are working,” said Arifin at the Ministry of Energy and Mineral Resources Building, Friday (13/10/2023).

Therefore, the government will return to using the State Revenue and Expenditure Budget (APBN) which was previously no longer used. Then, the government will also encourage private business entities (Government Business Entity Cooperation/KPBU) to be involved in providing household gas infrastructure.

Thus, the government will revise Presidential Regulation (Perpres) Number 6 of 2019 concerning the Provision and Distribution of Natural Gas Through Natural Gas Transmission and/or Distribution Networks for Households and Small Customers.

“With the existing Presidential Decree, PPP is not included in the scheme, now the Presidential Decree will be revised so that PPP can run so that business entities can run, with this we can beat that target, so apart from PGN’s portion, there will be PPP later from the Ministry of Energy and Mineral Resources. ,” said Arifin.

In order to encourage business entities interested in building gas pipelines, the government will also set the upstream special gas price at US$ 4.72 per MMBTU.

[Gambas:Video CNBC]

(pgr/pgr)