Jakarta, Indonesia Sentinel — On September 30, 2024, Indonesia’s Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, officially commenced construction of the second phase of the Cirebon-Semarang (Cisem) Gas Pipeline in Batang, Central Java.
The inauguration, marked by a first welding ceremony, represents a significant step toward improving the country’s energy infrastructure and supporting industrial growth.
The project, part of Indonesia’s National Strategic Projects (PSN), involves the construction of a 245-kilometer pipeline stretching from Batang to Kandang Haur Timur. It is entirely financed by a private consortium with an investment totaling IDR 2.7 trillion (approximately $175 million).
Notably, all materials for the pipeline were sourced domestically to comply with the 100% Local Content Requirement (TKDN).
Private Sector Leads Cisem Phase II Development
Minister Lahadalia highlighted that the construction of the Cisem pipeline is managed by a private sector consortium, a collaboration between PT Timas Suplindo and PT Pratiwi Putri Sulung.
This competitive approach, Lahadalia explained, is key to accelerating national infrastructure projects, ensuring timely completion, and reducing costs.
“I believe in healthy competition. While state-owned enterprises (SOEs) are crucial, the private sector must be encouraged to compete, especially when it can offer faster, more cost-effective solutions without compromising quality,” Lahadalia stated during the event.
Once completed, the pipeline will be operated by PT Perusahaan Gas Negara (PGN), a state-owned entity. However, Lahadalia emphasized that PGN must ensure affordable toll fees to maintain gas accessibility.
“We want to keep toll fees low since the pipeline is a government-backed investment,” Lahadalia added, signaling potential government involvement in determining tariff rates.
Strengthening Energy Supply and Supporting Industry Growth
The completion of the Cisem Gas Pipeline Phase II is expected to play a crucial role in strengthening Indonesia’s energy infrastructure by improving natural gas distribution to both commercial and industrial sectors.
Acting Director General of Oil and Gas at the Ministry of ESDM, Dadan Kusdiana, underscored the project’s importance in delivering affordable and sustainable gas supplies to industries and households across Java.
“This pipeline will help provide a reliable and more affordable supply of natural gas for key sectors, including small and medium-sized enterprises (SMEs) and larger industries like the Pertamina refineries in Cilacap and Balongan,” Kusdiana said.
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The project will also benefit other key sectors such as fertilizer production, which is vital for the country’s agricultural industry.
The Cisem pipeline is slated for completion in 2026, with the construction process taking place over 18 months across multiple locations.
(Ray)
