The construction project for the Cirebon-Semarang (Cisem) Phase II natural gas transmission pipeline, spanning 245 km (Batang-Cirebon-Kandang Haur), has officially commenced with the first welding observed by Minister of Energy and Mineral Resources, Bahlil Lahadalia. This project, valued at IDR 2.7 trillion from the state budget, is not merely an infrastructure initiative but a catalyst for broader economic growth. Bahlil emphasized the achievement of a 100% Domestic Component Level (TKDN) for the Cisem Phase II project, underscoring the importance of using local products. He applauded the project developers for utilizing domestically produced pipes, reinforcing the commitment to enhance local industry and reduce reliance on imports. The initial target was to use at least 60% local components, aiming to foster the growth of the domestic industrial sector. This focus on local production is expected to enhance production capacity and stimulate innovation while contributing to a decrease in the dependence on foreign products.
Beyond its immediate economic impact, Cisem Phase II has significant long-term implications for national energy security. The project is categorized as one of the National Strategic Projects, established under Presidential Regulation No. 3 of 2016, and its latest amendment in Presidential Regulation No. 109 of 2020. It aims to strengthen sustainable national energy infrastructure and improve the efficiency of natural gas distribution. This initiative is projected to provide affordable natural gas prices for both commercial and industrial sectors, eventually extending to households. The government plans to complete Cisem Phase II within 18 months, targeting a finish in the first quarter of 2026. This phase will complement Cisem Phase I, which is 60 km long and already operational. The Ministry of Energy and Mineral Resources is also preparing the Dumai-Sei Mangke gas pipeline project in Northern Sumatra to enhance domestic gas utilization and connect Java to Sumatra. It is estimated that this will add 300,000 household connections in Cisem and 600,000 in Dumai-Sei Mangke, significantly reducing LPG subsidies by IDR 630 billion annually and saving IDR 1.08 trillion per year in foreign exchange on LPG imports.
