Monday, 8 December 2014


The Natural Gas Based Industry Forum [FIPGB] projected demand for industrial gas in 2015 at 2,304 million mmsefd. The amount was an increase by 3.4% compared to that of this year at 2,224 mmscfd. Of the total need, 1,311 mmscfd was allocated for raw materials for fertilizer and petro chemical sector, while the remaining 1,194 mmscfd was for ceramics, glass, glassware, sement, metal and rubber gloves industry. This year gas supply to be fulfilled was around 1,800 mmscfd of total demand of 2,224 mmscfd. 1,092 mmscfd was used for raw materials for pertilizer and petro-chemical raw materials, while 1,132 mmscfd was for energy.

Chairman of FIP GB Achmad Saifiun stated in Jakarta on Monday [27/10] that industry players had urged the Government to guarantee supply oif natural gas. The request came from industries using gas as energy source. Saifun said that the industries asking for guarantee of gas supply were members of FIPGB, there were the industries of fertilizer, petrochemicals, glass, glassware, cement, metal rubber gloves, F&B, textile and textile products, types and automotive.

While asking for guarantee of gas supply this year, industry players were asking for assurance of gas supply next year to the amount of 2,304.71 mmscfd. FIPGB had also asked the new Government to develop infra structure for natural gas to smoothen distribution. He said that today 40.55% of natural gas from local resources were exported. And yet if the natural gas were used for domestic industry, it could enhance efficiency. However, to distribute natural gas at home needed long process especially to build infrastructure for distribution. Saifun asked President Joko Widodo to change mindset over natural gas. Gas had always been perceived as commodity so the stock were more pipelined outward.

Meanwhile the Ministry of Industry wished that in the formula for gas pricing also included added value from processing of products with gas as fuel. In this case FIOGB believed that the target of 6% growth for non oil-gas product was not hard to attain. The basic precondition was just reasonable price of gas or electricity since competitiveness mostly depended on low production cost.

The ministry of industry projected need for natural gas might exceed 3,000 mmcfd by 2030. In 2020 alone by estimate the demand could reach 2,993 mmcfd. Contract for gas supply for the fertilizer industry partly for petro chemicals were generally done by KKKS consortium. Fulfillment of demand for gas for the Industry sector beyond fertilizer and petro chemicals was normally executed by distributor companies like PN and Pertagas.

The Director General of Basic Manufacturing Industry [BIM] of the Ministry of Industry, Harjanto said that to secure economic and industrial growth energy from gas was the determinant factor. Under supply of energy, he said, caused contribution of the industry sector to GDP to be insignificant. In 2013 the industry sector contributed only 20.69% to GDP and yet it was supposed to be 30% - 40%.

Harjanto said that the impact of energy shortage today was strongly felt in manufacturing industry. The condition of manufacturing slumped in 2011 to 24.35% against GDP and 23.97% in 2013. Iron and steel in 2013 posted deficit up to USD 125 billion and if added on to deficit in petro chemicals it came to USD 25 billion per year; in semester I this year constantly decline to 23.69%. (SS)   

Business News - October 31, 2014

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