Government encourages Chevron to use coal gas
The Energy and Mineral Resources Ministry is encouraging PT Chevron Pacific Indonesia, the country’s largest oil producer, to utilize coal gas instead of natural gas to power its production activities.
Ministry Director General for Oil and Gas Evita Herawati Legowo said in Jakarta on Friday that the natural gas could then be allocated to other users, such as power plants and industry, which currently faced a shortage of
“We set up a team to boost the use of coal gas in the country and Chevron said it was ready to be part of the team,” she said in a press statement released on the ministry website.
The planned coal gasification facility would be jointly built by Indonesia and Japan, Evita said, adding that the two countries had prepared a supply of coal as well as the technology.
“We hope the project can supply 150 million standard cubic feet of gas per day [mmscfd] to Chevron,” she said.
The joint project was temporarily halted due to the earthquake and tsunami that hit Japan in March, but has now resumed, Evita said.
Coal gasification is the process of converting solid coal into combustible gases. After purification, the gases — carbon monoxide, hydrogen, methane and nitrogen — can then be used as fuel. Coal gas has the lowest emission level of all fossil fuels.
Apart from projects initiated by the government, state coal producer PT Bukit Asam and state fertilizer maker PT Pupuk Sriwijaya announced they would set up a coal gasification facility in Tanjung Enim, South Sumatra.
Chevron Pacific Indonesia only produced 359,713 barrels of oil per day (bpd) in the first quarter of this year, 2.7 percent below its target of 370,000 due to shutdowns at its 368 wells and oil coagulation in its pipeline network.
Indonesia’s domestic gas users, including state electricity companies and industries, have long sought a reliable gas supply.
This year, state electricity monopoly PLN said it would need around 1,800 mmscfd of gas supply, but as of today, the company only received 800 mmscfd.
PLN president director Dahlan Iskan claimed earlier that if the gas supply to PLN was met, the company could save Rp 60 trillion (US$7.02 billion). Most PLN power plants run diesel oil-powered generators.
The Forum for Natural Gas-Using Industries (FIPGB) also cited a problem of poor supply.
The organization requested that the government secure at least 796 mmscfd of gas for industries this year.
However, the government said it could only provide 538 mmscfd because a large portion of natural gas production was allocated for export.
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