REPUBLIKA.CO.ID, JAKARTA -- A holding company in the energy sector would help speed up massive development of gas infrastructure, an official said.

"We very much support plan to put PT Perusahaan Gas Negara (PGN) in a holding company under Pertamina as the parent company," Oil and Gas Director General IGN Wiratmaja Puja said here on Thursday.

Wiratmaja said with the combination, it would be easier for the energy and mineral resources ministry in assigning massive infrastructure program in the energy sector.

Meanwhile lawmaker Satya W Yudha from the Commission VIII of the Parliament said the merger would improve efficiency in the development of gas infrastructure.

Executive director of Energy Watch Indonesia Ferdinand Hutahean said after the combination the first step to be taken is to determine a strategy and priority scale for gas infrastructure development.

Development of household gas infrastructure should be a priority that the people could have cheaper energy replacing more expensive LPG, Ferdinand said.

Networks of gas infrastructure for industry should also be expanded that the country's manufactured products would be more competitive in prices with the use of cheaper energy, he said.

Earlier, Minister for State Enterprises (BUMN) Rini Soemarno said PT Perusahaan Gas Negara (PGN) would become a subsidiary of Pertamina.

Pertamina would be the parent company . The shares owned by the government in PGN would be handed over to Pertamina, whicyh is wholly owned by the government, Rini said.

She said the process of forming the energy holding company has been in the final phase and it is expected to be wrapped up in September this year.

Implementation is waiting only for a draft government regulation which is expected to be issued in mid July, she added.

She said the plan is part of the program of grouping state companies in a number of holding companies.

She said holding companies would also be formed in five other sectors - finance, construction and engineering, toll road , mining and housing.

She said PT Pertagas, which is a subsidiary of Pertamina operating in gas production, could be combined with PGN that they would not operate separately.

The office of the state enterprises minister said the energy holding company would be formed before July this year.

This year, Pertamina was asked by the government to build city gas networks in six areas for 23,158 households to add to 26,225 households already having gas supply in March 2016.

Gas pipe networks are already installed and operational in six cities including Prabumulih, South Sumatra for 4,650 households, Jambi 4,000 households, and Sengkang, regency of Wajo, South Sulawesi 4,172 households, Bulungan,EastKalimantan 3,300 households; Sidoarjo, East Java 6,154 households and Bekasi, West Java 3,949 households.

PT PGN also plans to expand its gas pipe networks by a total of 600 kilometers in 10 cities this year including Jakarta, Bekasi, Cirebon, Pasuruan, Surabaya, Sidoarjo, Semarang, Medan, Batam , etc.

PGN already distributed gas to more than 107,690 households until early 2016.

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