By OGJ editors
HOUSTON, Aug. 5 -- In a ceremony Monday, Indonesian President Megawati Sukarnoputri and Singapore Prime Minister Goh Chok Tong formally initiated the start of activities leading to the construction of 470 km of natural gas pipeline from Indonesia to Singapore, reported OPEC News Agency.
The proposed $420 million pipeline represents the first stage of the $6 billion, 10,000 km Trans-ASEAN Gas Pipeline (TAGP) linking 7 of the 10 Association of Southeast Asian Nations (ASEAN)—Indonesia, Singapore, Malaysia, the Philippines, Myanmar, Viet Nam, and Thailand (OGJ Online, Jan. 9, 2002).
"This is one important step aimed not only at lessening the pressure of unemployment in our country, but also at developing common prosperity in the region," said Megawati at the inauguration of the project.
The pipeline will enable Indonesia to export an initial 350 MMscfd of natural gas to Singapore, generating $9 billion for Indonesia over a 20-year contract period, OPECNA said. The line will have a total capacity of 600 MMscfd of gas, which ultimately could generate $700 million/year of foreign exchange earnings for Indonesia.
"The pipeline from Grissik in the southern Sumatra region of Indonesia to Singapore is of strategic importance because it is an integral part of the TAGP, which will be a milestone in ongoing cooperation in the energy sector between ASEAN countries," OPECNA quoted Purnomo Yusgiantoro, Indonesian minister of energy and mineral resources as saying.
Purnomo said more pipelines would be built in coming years as part of the Indonesian Integrated Gas Transmission Pipeline (PTGI) system, which would include a 584 km Grissik-to-West Java line, designed to supply 600 MMscfd to the West Java market by 2006.
The substantial volume of gas reserves throughout Indonesia will provide natural gas both for export and to meet domestic and industrial demand for cleaner fuel, he added.
Goh also expressed hope that ASEAN would complete TAGP quickly following completion of this second Indonesia-Singapore pipeline.
The first pipeline, 400 miles from Natuna Sea fields to Singapore, will supply 325 MMscfd of gas over a 22-year contract period and will generate $8 billion in revenue (OGJ Online, Mar. 27, 2001).
"The two projects will bring $17 billion in revenue for Indonesia. They bear testimony to the large mutual gains that can accrue from successful bilateral cooperation," Goh said.