Indonesia to encourage coal and gas consumption

May 04, 2005 02:00 AM

The Indonesian government would encourage domestic use of coal and gas in a bid to reduce fuel oil consumption by 20 to 30 %, Energy and Mineral Resource Minister, Purnomo Yusgiantoro said.
"If we do not take any move, our crude oil reserve would be depleted within the next 18 years, while gas within 62 years and coal 157 years. We use the assumption of annual oil reserves decline at 16 %," Purnomo said in a seminar on oil and gas industry.

Currently, Indonesian crude oil production has reached 1.1 mm bpd, and gas production amounted at 8.4 bn cfpd. Purnomo said, the government would impose a better pricing policy to encourage gas and coal consumption.
The government would also study possibility to provide incentive for gas and coal industry as the issue has been evaluated by the Oil and Gas Implementing Body (BP Migas). The incentive could be provided in split-cost, interest cost recovery or investment incentive.
"We would see what BP Migas would be conveyed to us," Purnomo said.

In addition to incentive, the government would improve non fiscal policy among others through development of infrastructure as well as public purchasing power.
"We are planning to build an Integrated Indonesian Gas Pipeline that will connect Java and Sumatra," Purnomo said.
Meanwhile, BI's Governor in a statement read by his senior deputy Miranda Goeltom, said natural gas role in the country would increase with its reserves which is predicted at 178 tcf.

"Indonesia is the world’s sixth largest producer and the largest exporter of LNG. But gas consumption in the country was still low at some 25 % of its total potential," Miranda said. Optimum consumption of gas and coal, she said, has become one important factor to overcome fuel oil problems with its price continued to increase, and to accelerate national economic recovery.
Huge reserves of natural gas in Indonesia were situated in Natuna, Matindo, and Tangguh.

Source: Antara
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