Manufacturing investment: Seamless steel pipes support the national gas network
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Investasi manufaktur: Pipa baja seamless topang jaringan gas nasional
7 November 2024
By M. Ryan Hidayatullah
Bisnis, Jakarta — The establishment of a seamless steel pipe factory by PT Artas Energi Petrogas and Inerco Global International is expected to boost the development of gas pipeline infrastructure in the country.
Deputy Minister of Industry Faisol Riza stated that the government's ongoing efforts to establish a gas network could later utilise products from the factory. This factory, being constructed in the Krakatau Steel Cilegon Industrial Area Complex in Banten, involves an investment of Rp2.5 trillion.
"The development of a gas network in Java could become a significant opportunity for all pipe companies, especially those specialising in the manufacturing of seamless pipes," he said on Wednesday (6/11).
According to him, the steel pipe factory will also significantly reduce imports. Currently, Indonesia imports steel pipes valued at Rp15 trillion per year. Additionally, utilising domestically produced steel pipes for the gas network could help the government reduce subsidies for liquefied petroleum gas (LPG).
"Our subsidies could decrease if these pipes are used for the gas network. The development of the gas network is considered a solution to reduce energy subsidies," he emphasised.
Meanwhile, CEO of Artas Energi Petrogas, Jose Antonio Reyes, mentioned that the seamless steel pipe factory under construction will have a production capacity of 200,000 tonnes per year for hot roll mill and 100,000 tonnes per year for heat treatment.
"Our commitment does not stop here. We have also started to consider not only downstream but also upstream expansion," he added.
He further explained that the factory is projected to meet domestic steel pipe needs, particularly for the development of oil and gas infrastructure.
"The largest demand indeed comes from the oil and gas sector, but these pipes are not just for the oil and gas sector. They can also be used for industrial and defence purposes. There are many sectors that could utilise these steel pipes," he concluded.
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