Indonesia: Planning a Pilot Carbon Capture and Storage Activity

Sovereign Project | 47119-001

Summary

The Republic of Indonesia's (Indonesia) National Medium Term Development Plan (RPJMN) projects an annual economic growth rate of at least 7% by 2014. This current growth trajectory will have direct and significant implications on the energy sector. To ensure the sustainability of Indonesia's long-term growth trajectory, it is imperative that newly employed sources of energy be low in greenhouse gas emissions (GHG), as well as domestically sourced to bolster the country's energy security. The Government of Indonesia has confirmed these priorities by committing to lowering its carbon emissions by 26% using domestic resources by 2020 relative to business-as-usual, or up to 41% using international climate funds, as stipulated in the Presidential Decree No. 61, Indonesia's National Action Plan for GHG Emission Reduction (RAN-GRK).

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Project Name Planning a Pilot Carbon Capture and Storage Activity
Project Number 47119-001
Country Indonesia
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8407-INO: Planning a Pilot Carbon Capture and Storage Activity
Carbon Capture and Storage Fund US$ 225,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Energy - Energy efficiency and conservation
Gender Equity and Mainstreaming
Description The Republic of Indonesia's (Indonesia) National Medium Term Development Plan (RPJMN) projects an annual economic growth rate of at least 7% by 2014. This current growth trajectory will have direct and significant implications on the energy sector. To ensure the sustainability of Indonesia's long-term growth trajectory, it is imperative that newly employed sources of energy be low in greenhouse gas emissions (GHG), as well as domestically sourced to bolster the country's energy security. The Government of Indonesia has confirmed these priorities by committing to lowering its carbon emissions by 26% using domestic resources by 2020 relative to business-as-usual, or up to 41% using international climate funds, as stipulated in the Presidential Decree No. 61, Indonesia's National Action Plan for GHG Emission Reduction (RAN-GRK).
Project Rationale and Linkage to Country/Regional Strategy Carbon capture and storage (CCS) is an emerging technology which could help Indonesia to limit its GHG emissions from the energy and industrial sectors while also increasing Indonesia's national energy security. CCS could be particularly effective in Indonesia given Indonesia's several large high-CO2 natural gas fields, and the possibility of using Enhanced Oil Recovery (EOR) to extract more oil from Indonesia's existing fields, making CCS an attractive possibility for reducing the country's GHG emissions and strengthening domestic energy security. This S-CDTA will evaluate technical viability for a pilot CCS activity in Indonesia. PT PERTAMINA, Indonesia's state-owned oil and gas company will be the executing agency (EA).
Impact Strengthened capacity within PT PERTAMINA and the Government of Indonesia to design and plan CCS pilot activities.
Project Outcome
Description of Outcome Technical viability analysis completed.
Progress Toward Outcome Evaluation of the technical viability of the proposed pilot CCS activity was finalized and presented to key stakeholders in early March 2015 in Surabaya.
Implementation Progress
Description of Project Outputs

1. Preliminary engineering design and cost estimates developed.

2. Financial analysis of the CCS pilot activity

3. Advice on legal and regulatory framework for pilot CCS activities provided

Status of Implementation Progress (Outputs, Activities, and Issues) The preliminary engineering design and cost estimates and the financial analysis of the CCS pilot activity have been finalized. The advice on the legal and regulatory framework for pilot CCS activities has also been finalized. Interim workshops were held in Bandung (Indonesia) in early September 2014 and in Japan in late September 2014, and the final workshop was held in early March 2015 in Surabaya.
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design All key stakeholders including the Director General, Oil and Gas, Ministry of Energy and Mineral Resources, and BAPPENAS, bilateral and multi-lateral donors, and PLN, the power company, were consulted with during project design. A memorandum of understanding was signed between ADB, the government, PERTAMINA and the Government of Japan (co-financier of the proposed pilot activity) to spell out key implementation arrangements, the envisaged project outcome, impact and outputs, and roles and responsibilities of the various stakeholders.
During Project Implementation A steering commitee comprised of the Director General, Oil and Gas, Ministry of Energy and Mineral Resources, and BAPPENAS, the planning ministry, are periodically consulted with on TA implementation proposals and progress.
Business Opportunities
Consulting Services ADB contracted through single-source selection (SSS). ADB's guidelines on firm recruitment will be followed in the selection of the consultant. The implementation of the small-scale technical assistance will require the services of a multidisciplinary team comprised of international and national consultants. Eight consultants will be recruited through a domestic firm in accordance with the ADB''s Guidelines on the Use of Consultants (2013, as amended from time to time). The consultant will be responsible for administering the workshops and knowledge events envisioned under this technical assistance program.
Procurement No procurement envisaged for this project.
Responsible ADB Officer Pradeep Tharakan
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Perusahaan Pertambangan Minyak dan Gas Bumi NegaraVP Upstream Technology Center, Gedung
Kwarnas 7th Floor, Jl. Medan Merdeka
Timur No 6, Jakarta 10110, Indonesia
Timetable
Concept Clearance 30 Apr 2013
Fact Finding 02 Jul 2012 to 31 Jul 2012
MRM -
Approval 18 Jul 2013
Last Review Mission -
Last PDS Update 16 Mar 2015

TA 8407-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
18 Jul 2013 - 18 Jul 2013 15 May 2014 15 Aug 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 225,000.00 0.00 0.00 0.00 0.00 225,000.00 18 Jul 2013 179,452.64

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