Determination of LNG Supply Chain and Estimation of LNG Economical Price for Locomotives in Java Island

Abstract

Natural gas is one of fuel utilization alternatives besides diesel. As a country that has
a huge amount of natural gas reserves, Indonesia should utilize its fuel optimally. In addition,
gas fuel for trains (locomotives) is more environmentally friendly compared to locomotive
diesel fuel. The goal of this study is to conduct supply chain analysis of fuel in Java Island –
Indonesia, through cash flow modeling system. This system will be applied for locomotive fuel
usage that is efficient, effective and economical. The methodology of this study is conducting
survey to calculate demand data and existing facilities, estimating the investment cost which is
needed to apply LNG technology in the rail sector (locomotives), and conducting simulation of
economical calculation to get the fee for each supply chain. Based on calculation, diesel
consumption for train sector in Java Island is 162,961 KL per year or equivalent to 8.80
MMSCFD of natural gas consumption. The pattern of LNG distribution on the supply chain for
locomotive sector that is suitable to be applied in Java Island consists of two types, LNG
distribution pattern using LNG resource from outside or inside Java Island (by constructing
mini LNG plant). By doing economical calculation, the result of LNG price for the train
(locomotive) sector ranges from 19.51 to 26.51 US$/MMBtu, depending on distribution pattern
type and conversion percentage.