Our Business

Natural Gas Industry in Indonesia

Indonesia's natural gas reserves of some 104.3 trillion cubic feet are the largest in the world. Proven reserves consist of 62.7% of the total and 37.3% are classified as potential. Gas exports have already become the second largest generator of foreign exchange and Indonesia is the largest producer of Liquefied Natural Gas (LNG) in the world.

The Government of Indonesia (GOI) is very eager to expand the domestic use of natural gas as a replacement for fuel oil and associated products. The major reason for this is both to increase foreign currency earnings from declining oil production, and to reduce domestic oil consumption, thus making more oil available for export.

Nearly all of the natural gas reserves found in Indonesia contain quantities of propane and butane which has accelerated the development of LPG for domestic consumption. The GOI's objective is to encourage the populace to use LPG and plans to achieve this goal by the aggressive development of local production of LPG. This will be done by tapping into small reservoirs of natural gas all over the archipelago and by using gas that is presently being flared to produce usable products. SDK's efforts to convince PERTAMINA of the viability of the medium size modular gas plant concept and to establish the MMGP in the Tugu Barat field were therefore timely and in accord with the GOI's thrust towards further expansion of the natural gas industry by reducing the quantity of flared gas as well as putting smaller gas fields into production.

Flared Gas

All oil fields produce some natural gas, which is normally flared as a part of the oil production process, and almost none of these facilities have provisions for processing natural gas.

Environmental Considerations

In addition to adding value to ongoing operations of PERTAMINA, there is, of course, the favorable effect of helping the environment through the use of natural gas that has less harmful effects to the environment, than coal or fuel oil.

Natural gas yields fewer pollutants, such as sulfur dioxide, particulates and nitrogen oxides, compared to other fossil fuels. Natural gas has a low carbon to hydrogen ratio, which results in low CO2 emissions per unit of energy. It can be used in many types of burners, usually without need for pre-pressurization, and at a wide range of flow rates, meaning it is well suited to modern automation techniques, thereby improving combustion efficiency, and reducing energy losses and costs.

Importance of Medium Size Modular Gas Plant

In contrast to large scale LPG facilities, the MMGPs do not involve extremely complex gas processing technology. They have been extensively tested over three decades in thousands of locations around the world and the equipment has been proven to be reliable and long lasting.

The MMGP is built around basic gas processing techniques that, when combined with state of the art computer operated process control, plant management and safety systems results in a simple, cost effective and reliable plant.

An MMGP is particularly well suited to process gas that would otherwise be flared. The particular feature of the MMGP that attracted PERTAMINA was that it can capture and process natural gas from smaller gas fields that are un-economic for large scale LPG type plants.

H&H Technical, LLC (formerly W.L Hamilton, P.C.), USA, the system's designer and manufacturer, has produced over three hundred of these plants and provides, as part of its contractual obligations, a Performance Guarantee that the products produced by the plant will be in the quantities and of the quality specified. There are no technology licensing agreements with the plant manufacturer since the MMGP uses standard non-proprietary technology.

Meticulous detail went into the planning, design and fabrication of the SDK-MMGP and this attention to detail has resulted in a plant that is both efficient and easy to maintain as well as requiring a minimum of manpower and supervision to operate.