BANDUNG, June 29 (EngineeringDaily) --State-Owned Enterprise (BUMN) Minister Dahlan Iskan will pursue the construction of a gas pipeline from Medan, capital of North Sumatra Province in Indonesia, to Riau in order to supply Iskandar Muda fertilizer plant located in Aceh with a necessary ingredient for its product.

"The advantage of the pipeline is that Iskandar Muda can obtain economical gas directly from the gas source. So far it has been difficult to develop fertilizer because there is no gas," said Iskan.

For this project, the ministry assigned PT Industrial Engineering (Rekind) to conduct a study on the projected gas pipeline connection from Medan to Riau on the central east coast.

Meanwhile, another company, PT Pertagas, has been building a gas pipeline from Medan to the city of Lhokseumawe in Aceh. This shorter line, when connected to the Medan-Riau line, will allow an increased gas supply throughout the northern region and allow the fertilizer industry in Aceh more direct access to the gas supply.

With both gas lines completed, Indonesia will boast a much larger pipeline network reaching from the northern cities of Lhoksumawe and Medan and up to Aceh down to the southern capital of Palembang and to Cirebon on the island of Java.

According to Iskan, the construction of the gas pipeline from Lhokseumawe to Medan will be completed in October 2014. Therefore, with the construction of the Medan-Riau gas pipeline the completed network could be operational in a year.

Iskan said the plan to build the 500 kilometer-length gas pipeline between Medan and Riau was first planned ten years ago. At that time, the government allocated future funds to developing the pipeline to connect the cheap gas sources in southern Sumatra to Aceh.

"The pipeline development is also planned to continue on to connect with East Java. Currently there is also another agreement in the works that a pipeline connecting Cirebon and Semarang on the island of Java will start construction soon," he explained.