Page 7 - AsiaElec Week 18 2021

AsiaElec COMMENTARY AsiaElec

the project. Soeparno told Kontan on April 25.
Sihite added that a meeting in on January Indonesia’s upstream watchdog SKK Migas,
between the energy ministry, BPH Migas and meanwhile, is the latest to step into the debate.
the Ministry of Law had concluded that BNBR The regulator has pledged to guarantee supplies
could not be picked as a direct replacement. for the Cisem pipeline, but has said that ensuring
The official said that from a practical stand- there was enough demand for that gas is a bigger
point projects tended to be developed more issue.
quickly when funded by the state, adding that SKK Migas finance deputy Arief Setiawan
the government’s desire to supply affordable gas Handoko said on April 26 that the pipeline could
to industrial and commercial users meant it was receive gas supplies from a number of projects.
motivated to guarantee feedstock volumes. These include the Jambaran-Tiung Biru (JTB)
The Indonesian government passed a new gas field, which is part of the Cepu Block, the
regulation in April 2020 that capped prices for Muriah and Lengo blocks, as well as a number of
gas supplies to power plants at $6 per mmBtu other unnamed projects.
($165.96 per 1,000 cubic metres). Jakarta has SKK Migas said on April 15 that JTB, along
also set a similar price cap for the fertiliser, pet- with the Sidayu and Bukit Tua Phase 2B pro-
rochemical, steel, ceramics, glass and rubber jects, would come online later this year. JTB is
gloves industries. estimated to come on stream in the fourth quar-
The public squabble between the two energy ter of 2021, with an initial production of 192mn
agencies has alarmed senior politicians, while cubic feet (5.44mn cubic metres) per day of gas.
another wing of the government has warned “For Cisem, we will ensure there is gas supply
that the issue of gas supply is not as big as feared, in 2022-2025. So what is important is the real
with demand being a bigger problem. level of demand,” Handoko said during a virtual
press conference. The official stressed the impor-
What next tance of determining the level of demand before
Commission VII, the parliamentary commis- work started on the pipeline.
sion responsible for energy issues, has called for It is easy to understand why Commission VII
the heads of both the energy ministry and BPH is alarmed by the divide over Cisem, given that
Migas to explain themselves. the project is seen as key to helping to alleviate
The commission’s deputy chairman, Eddy Central Java’s gas supply shortfall. However, the
Soeparno, said the two bodies’ back-and-forth squabbling further highlights the challenges fac-
arguing made a legal review of the whole issue a ing the country’s energy sector.
necessity to ensure that all sides were following There is a distinct lack of cohesion amongst
the law. the country’s energy planners, not just over who
“We at Commission VII will ask for an expla- has the final say over a pipeline project that has
nation from the Ministry of Energy and Min- been in limbo for 15 years but also about what
eral Resources and BPH Migas regarding the any future development’s biggest challenges
results of the internal discussions on both sides,” are.™

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