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Home  >>   Daily News  >>   Indonesia  >>Energy  >> Pertamina teams up with KAI in building gas, fuel pipeplines
NEW UPDATES Asean Affairs  1 September 2015  




Pertamina teams up with KAI in building gas, fuel pipeplines

State-owned gas giant PT Pertamina has signed a memorandum of understanding with state-owned railway operator PT Kereta Api Indonesia (KAI) to help build a gas and fuel pipeline through land owned by KAI, as well as to help with transportation and distribution.

The memorandum will help advance several of Pertamina’s pipeline projects, including building a 90-kilometer long liquefied natural gas (LNG) pipeline along KAI-owned land between Gresik and Semarang, and a fuel pipeline from Cilacap to Yogyakarta and also Cilacap to Bandung.

Pertamina president director Dwi Soetjipto said that the agreement would help alleviate land-related problems that have been known to obstruct the development of energy infrastructure.

Aside from the easier scope to build pipelines, Pertamina will also utilize KAI’s trains to distribute and transport fuel.

“Pertamina needs to distribute energy through constructing pipelines, but the land permission has always been a problem for us. Thankfully with this agreement with the KAI, the land-acquisition problems will decrease and the distribution and transportation of natural gas and fuel will be improved,” Dwi said at the signing ceremony at the Pertamina offices in Central Jakarta on Friday.

“Our operations will become more efficient,” he added.

The agreement also will include the “right of way” distribution of Pertamina’s fuel using KAI’s trains, particularly from the East Java port city of Tuban to Surabaya.

Meanwhile, KAI president director Edi Sukmoro added that the agreement will help Pertamina reduce transportation costs and distribution times, which he says is in line with President Joko “Jokowi” Widodo’s philosophy of cost efficiency for state-owned enterprises.

“This teamwork between the two state-owned enterprises will reduce the dependency on land transport, which will also increase the growth of both of the companies,” he said.

Aside from land acquisition and transport efficiency, the memorandum also discusses the idea of gradually replacing high speed diesel (HSD) fuel with liquefied natural gas in KAI’s trains.

However, Dwi noted that the ambitious conversion plan must be thoroughly researched first.

“The use of LNGs on trains will be able to reduce KAI’s fuel costs by 40 percent. However, we must examine whether or not the trains are capable of running on LNGs first by looking at their engines and fuel tanks,” he noted.

Edi of KAI added that he supported the idea of converting to more natural fuels, but could not say when the changes can be applied to KAI’s train system.



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