Gas Development Master PlanSteering Committee Meeting – 28 March 2013Draft Policy Note 5 : Framework for Gas Infrastructure Development

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National Gas Transmission and Distribution Master Plan

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National Gas Transmission and Distribution Master Plan

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National Gas Transmission and Distribution Master Plan

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The issues….• The Government officially details its plans for the construction of

new gas pipelines transmission and distribution infrastructure in the Migas National Gas Transmission and Distribution Master Plan.• The most recent version of this plan covers the period 2012 to

2025 and was issued by the Minister of Energy and Mineral Resources and dated 6 September 2012.• There is no information available which sets out the methodology

which has been used to prepare this plan, nor is there any clarity on the supply/ demand scenarios on which it is based.• It appears to be a list of existing pipelines, the date built, their

relevant dimensions and a stated transportation capacity (although the basis for capacity calculation is unknown) together with a list of planned pipeline developments for which data is less precise.

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More issues….• The plan does not appear to have any strategic basis,

which is expected of any kind of Master Plan, covering the essential issues such as:– Supply point locations and volumes of gas available for domestic

consumption;– Projected demand, by location, for the development of industrial,

commercial, residential or other (such as CNG for vehicles) markets;– Projections of gas flow or capacity requirements required to link

the supply and demand locations.• There appears, therefore, to be ineffective transparency in

the regulatory process for the development of gas infrastructure and no clear basis for a national strategy to ensure that gas is delivered to appropriate locations in appropriate quantities to enable its efficient utilisation to the national good.

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Recommendations• If the gas industry in Indonesia is to make maximum use of the

available gas resources and infrastructure in the country it is essential that there is a Strategic Master Plan which sets out the long term, coordinated policy for development of:– Gas supplies allocated between exports and domestic utilisation;– Markets which make the most efficient use of the gas to the benefit of

the national economy overall;– Infrastructure which can deliver the gas supplies to those markets safely,

consistently and securely.• In addition, it is essential that a clear structure for the industry is

decided and implemented with definition of roles and responsibilities of all possible players within, including the regulators. This structure should define how the markets for gas will operate and interact with one another, what rules will apply, what Codes of Practice for all aspects of operations, etc in order that the policy can be fully and efficiently implemented.