ESDM Minister LPG Plant Investment Expected To Start Early 2025

Tuesday, 19 Nov 2024

By putri@insightinnews.com The Minister of Energy and Mineral Resources, Bahlil Lahadalia, has announced that the investment target for the construction of a Liquefied Petroleum Gas (LPG) plant with a capacity of 2 million tons is set to commence in January 2025. Bahlil elaborated that his team, in collaboration with SKK Migas, is currently assessing the potential for additional LPG production domestically, which is estimated at 1.8 million tons through a mixture of Propane (C3) and Butane (C4). He indicated that plans for the new LPG plant will be finalized between November and December 2024. "The planning for the investment, including who will invest and when, will begin in January," Bahlil stated at the Ministry of Energy and Mineral Resources office on Thursday, November 14, 2024. The former chairman of the Indonesian Young Entrepreneurs Association (HIPMI) emphasized that the investment for the plant's construction will be conducted transparently. This approach means that the development will not solely rely on PT Pertamina (Persero), the state-owned enterprise in the oil and gas sector. "We will ensure transparency to foster competition. It is essential that we maintain openness," Bahlil remarked. The proposal for the new LPG plant was first articulated by Bahlil during a working meeting with Commission XII of the Indonesian House of Representatives on November 13, 2024. He underscored the significance of establishing the LPG plant to reduce the volume of imports, as the current LPG imports exceed domestic production. According to his records, Indonesia's LPG production stands at 1.9 million tons annually, while consumption reaches 8 million tons per year, resulting in an annual LPG import requirement of approximately 6.1 million tons. Bahlil stated that once the new LPG plant is established, imports could be reduced to 4 million tons per year. He also mentioned plans to develop a natural gas network for households, which will be prioritized in regions from Java to Sumatra. The chairman of Golkar emphasized that this natural gas initiative is expected to decrease the volume of LPG imports, as it will utilize domestic gas production. "We are still facing a shortfall of approximately 4 million tons. Therefore, our strategy is to focus on developing the natural gas network, particularly in Java, including West Java, East Java, Central Java, Banten, DKI, and Yogyakarta. This is our priority, while parts of Sumatra are already underway," Bahlil remarked.

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