The relocation of the LNG Terminal from the planned Tanjung Benoa Port to the mangrove special area of Ngurah Rai Community Forest Park in Sidakarya Village, Bali drew protests from representatives of the Intaran Traditional Village, in early June 2022.

LNG terminal construction sacrifices mangroves and the Bali marine ecosystem

The construction of the LNG terminal is considered to be in conflict with regional regulations on regional spatial plans, as well as the Coastal and Small Island Management Act.

Southeast Asia (SEA) is said to be the “last bastion” of coal industry glory. In 2019, while the rest of the world was cutting back on coal, coal power generation in SEA grew by 12 percent. It is an ironic reality that the region contributes to and is heavily impacted by climate change, due to its reliance on coal. 

The Center for Energy, Ecology and Development (CEED) in Manila says the civil and community movement against coal has paid off. Financial institutions have been forced to withdraw from financing coal-fired power plants. Unfortunately, SEA countries are not using this development to switch to truly clean energy from renewables.

Southeast Asians are now forced to face another fossil fuel: Natural gas, which is more accurately referred to as fossil gas.

“SEA countries as the last bastion of coal are rapidly turning into fossil gas and LNG hubs. Governments and power companies are promoting massive gas expansion plans under the guise of development,” said Gerry Arrances, executive director of CEED.

Today, Southeast Asia has 117 Giga Watts (GW) of new fossil gas capacity in pre-construction, surpassing East Asia’s 77 GW in unbuilt fossil gas power plant expansion.

Touted as a clean alternative to coal, fossil gas is dangerous for climate-vulnerable Southeast Asia.

Moreover, the planned expansion of fossil gas in Southeast Asia threatens the region’s rich marine biodiversity. These concerns have prompted the indigenous community in Desa Adat Intaran, Sanur, Bali to strongly oppose plans to build a liquefied natural gas (LNG) terminal in their area.

Dozens of representatives of the residents of Intaran Traditional Village, Sanur, visited the Bali Parliament building on June 9.

Together with pecalang and prajuru of the traditional village, they submitted a letter of rejection against the construction of a planned LNG terminal in the mangrove forest area of the Ngurah Rai Grand Forest Park (Tahura), Sidakarya Village, South Denpasar District, Denpasar City, Bali.

The planned LNG terminal would be a project of the Bali Province Regional Company PT Dewata Energi Bersih (DEB) together with PT PLN (Persero) through its subsidiary PT PLN Gas and Geothermal.

The area has a vital function as a carbon sink and as protection against abrasion and against tsunamis in Bali. The utilization of coastal areas in the Badung Strait is also feared to have an impact on the coral reef ecosystem.

The Indonesian Forum for the Environment (Walhi), the Bali Environmental Advocacy Working Committee (Kekal) and the Bali People’s Struggle Democracy Front (Frontier) had previously also rejected the LNG terminal construction plan.

The rejection was conveyed during the socialization of the LNG terminal construction plan in Sidakarya, Densel, by PT Dewata Energi Bersih (DEB), last May 21.

The construction of the LNG terminal is considered to be in conflict with regional regulations on regional spatial plans, as well as the Coastal and Small Island Management Act.

Ironically, PT DEB has not yet obtained an environmental impact assessment (EIA).  Kelihan Banjar Dangin Peken Desa Adat Intaran, Made Sunarta, expressed his concern about the sustainability of the temple on the Sanur coast if it is affected by abrasion that may be caused by the planned construction of the LNG terminal.

“Although the location of the LNG terminal project is in Sidakarya, it is adjacent to the Intaran Traditional Village area,” said Made Sunarta. 

He added that there are six temples in Intaran Traditional Village that are at risk from the project. One of them is Pura Dalem Pengembak, which is only about 280 meters from the planned location of the LNG terminal.

In addition, the construction of the LNG terminal is also considered contrary to President Joko Widodo’s (Jokowi) mission in mangrove restoration efforts. Shrinking mangrove areas can degrade the quality of Bali’s environment and disaster mitigation, cause ecosystem damage, and exacerbate abrasion on the Sanur coast, as well as potentially destroying the sacred temple area on the Sanur coast.

“We are not rejecting clean energy. What we reject is the construction of the LNG terminal, which should be in accordance with the Bali Provincial Regulation in Pelindo Benoa, but now it is in Sidakarya and Sanur,” he said.

Opposition to the project grows

According to Sunarta, 14,273 indigenous people rejected the plan for this huge project because they will live forever side by side with the LNG terminal if construction goes ahead.

Although the community recognizes the importance of clean energy for the island, public dialogue on the project left many questions unanswered. This prompted residents to write to the Bali Legislative Council. They also sent letters to the governor of Bali, and the Denpasar City Government. 

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The Director of Walhi Bali, Made Krisna Dinata, expressed his rejection of the plan to build an LNG Terminal in the special mangrove area of the Ngurah Rai People’s Forest Park in Sidakarya Village during a socialization by project implementer PT Dewata Energi Bersih, at the end of May 2022. Courtesy: Walhi Bali.

Made Krisna Dinata, director of Walhi Bali, expressed his rejection of the plan to build an LNG Terminal in the mangrove special area of Ngurah Rai People’s Forest Park in Sidakarya Village during a consultation by project implementer PT Dewata Energi Bersih, at the end of May 2022.

He is worried that the construction of the LNG terminal and dredging of 3,300,000 cubic meters of sand for the sea channel will accelerate abrasion and will certainly threaten the temples on the coast.

He explained that in addition to legal regulations, research found that the project has the potential to damage mangroves because of the sand dredging.

Even the results of research conducted by Kekal, Frontier, and Walhi found that the construction of the LNG terminal in the mangrove area would clear at least 7.73 hectares of mangroves and damage 5.75 hectares of coral reefs.

“The dredging will definitely result in sedimentation. Then mangrove clearing will give a bad impression ahead of the G20 Presidency which actually campaigns for mangrove forests for climate change,” he continued.

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The design of the LNG Terminal to be built in a special mangrove area at the Ngurah Rai People’s Forest Park in Sidakarya Village, Bali. Courtesy: PT DEB

Wayan Gendo Suardana, chairman of NGO Kekal Bali, said that the LNG terminal issue is a departure from the regional regulation on the spatial planning of Bali Province, which stipulates that the LNG terminal would be built in Benoa Harbor. 

Law No. 26/2007 on Spatial Planning states that the review and revision of the provincial spatial plan should not be done simply to accommodate deviations in spatial utilization. 

“This means that the revision of spatial planning should not be done to accommodate a project license,” said Gendo, Wednesday (22/6).

The plan to build the Sidakarya LNG terminal stems from a memorandum of understanding (MOU) between the governor of Bali and PLN on August 21, 2019. Under the MOU, the governor’s obligation is to provide land for the LNG Terminal and appoint a regional company to manage it.

After appointing the regional company PT Dewata Energi Bersih (PT DEB), a joint feasibility study was conducted with Indonesia Power in 2021. In that year, the Technical Implementation Unit of the Forest Management Unit of the Ngurah Rai Tahura Forest Park also changed the LNG Terminal project area from a protection block to a special block and the Bali DPRD wanted to change the Bali Province spatial planning regulation to accommodate the LNG Terminal, because on April 21, 2021 the governor of Bali had issued a principle permit.

According to Gendo, if the basis used by the Bali governor is a city-level regional regulation, then it must refer to the Spatial Planning Law, which is arranged in stages and must be done in a bottom-up manner.

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The design of the LNG Terminal to be built in a special mangrove area at the Ngurah Rai People’s Forest Park in Sidakarya Village, Bali. Courtesy: PT DEB

‘No violation, just lack of information’

Ida Bagus Ketut Purbanegara, the public relations officer of PT Dewata Energi Bersih (PT DEB), emphasized that the LNG terminal installation is safe and does not violate the rules.

He also said he respects the differences of opinion in the community and considers the rejection of the project to be natural, due to the lack of socialization about the benefits for Bali.

Purbanegara explained that the renewable energy mega project plan began with a plan to build an LNG storage terminal in a special block area, Pedungan, Sidakarya, Denpasar City.

He said that the perception that the construction of the LNG terminal, for example, could cause explosions, drilling, and harm coastal communities is incorrect.

He added that the issue is a lack of public understanding about LNG itself and about how the plan will actually have a positive impact on the surrounding community

“There are also those who say the construction of the LNG terminal will clear 16 hectares of mangrove land, which we also need to straighten out. It is true, there is a special block (mangrove) of that size, but we only utilize three hectares of it, so we will not clear the mangrove forest there,” Purbanegara explained.

In addition, he continued, the Sidakarya LNG Terminal and the gas pipeline are already listed in the spatial layout of Denpasar City, according to Denpasar City Regional Regulation No. 8 of 2021. And, the construction of the LNG plant will support the use of clean energy for power generation, so that there is an additional 2×100 MW power plant.

In this initial stage, he said, the planned development is to build a jetty around 500 meters from shore for ships transporting LNG from the Tangguh Gas Field in Papua.

He claimed that building the jetty will not damage coral reefs since the coral in the area to be used is already dead. Furthermore, there will be pipe planting for gas distribution at a depth of 10 meters from the jetty to the LNG terminal passing through the mangrove area.

“With a depth of 10 meters, the pipe will not disturb the mangrove roots that only reach a depth of about 6 meters,” he said.

Regarding the existence of the temple, he ensured that it would not interfere with the sanctity of the temple.

As for the spatial planning, according to him, there is indeed a discrepancy between Denpasar City Regional Regulation No. 8/2021, which calls the Sidakarya area a special block for LNG utilization, and Bali Provincial Regulation No. 3/2020, which states that the area is a conservation area.

Related to this, his party refers to the provisions of the Job Creation Law where it is stated that if there are different rules, the latest provision is used as a reference. “In this case, it is the Denpasar City regulation,” he said.

The LNG terminal project was originally to be built at Benoa Port and managed by PT Pelindo Energi Logistik (PT PEL). However, it was eventually relocated to the Sidakarya Village area, Denpasar. The Bali Terminal LNG infrastructure development is targeted to operate to supply gas to the Pesanggaran Diesel and Gas Power Plant (PLTDG) in early 2023. 

For fuel for the gas power plant in Pesanggaran, PLN will utilize LNG, which currently has a long-term contract with the LNG producer, BP Tangguh. A subsidiary of PT PLN (Persero), PT PLN Gas and Geothermal (PLN GG) with a 51-percent shareholding structure, and a regional company owned by the Bali Provincial Government, PT Dewata Energy Bersih (DEB) with a 49-percent shareholding, have been appointed as the implementers. 

The central and local governments want to accelerate gas utilization by building LNG terminal infrastructure, as its utilization is targeted to increase to 22 percent by 2025, including in Bali.

Ida Bagus Setiawan, head of the Energy and Mineral Resources Division of the Bali Provincial Manpower and Energy and Mineral Resources Office, said that additional energy sources for Bali must be clean and in accordance with the regulations and policy directions of the Bali Government. That means power plants can no longer be fuelled by coal or oil.

“This means that there will be an energy transition, while towards the transition to new renewable energy, natural gas is the most reliable foundation,” he explained. 

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Representatives of indigenous peoples and environmental activists hold a demonstration against the LNG Terminal in Sidakarya, Denpasar, Bali, June 22, 2022.

Although Bali does not have natural gas deposits, power plants in the province can use LNG imported from outside. The government is projecting that Bali will eventually be able to produce enough power from LNG.

This is what must be prepared, Gus Setiawan said, as he talked about how Bali would be self-sufficient and would play a regional role in energy management.

There are plans to convert all diesel plants to run on gas, which will mean bigger demand than the LNG terminal at Pelindo Benoa would be able to handle. Therefore, a more specialized LNG terminal needs to be built to ensure that the gas is always available, he said.

“And we want the LNG not to be controlled from outside, because the local government will not get anything. We should not continue to be spectators, but we must be the direct dancers,” he said. 

He emphasized that LNG terminals are safe and that generating systems can be managed with a closed process, so there is not much pollution. 

He added infrastructure on land will only be for transport and storage of the LNG, which, he said, will also allow new businesses to grow.

“Because in the process of changing from liquid to gas, there is cold energy that goes out. This energy can be accommodated in cold storage that can be utilized for free by local fishermen,” he concluded.

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The design of the LNG Terminal to be built in a special mangrove area at the Ngurah Rai People’s Forest Park in Sidakarya Village, Bali. Courtesy: PT DEB

Meanwhile, IGW Samsi Gunarta, the head of the Bali Provincial Transportation Office, explained that construction and operations of the LNG terminal will have to follow environmental guidelines.

“If you want to do dredging and risk, it must be stated in the environmental management plan document which is part of the environmental impact analysis,” he added.

“Permits are not issued if the things required in the environmental document cannot be confirmed, and the project can be stopped if such things are not met.” 

The same process will occur at Sidakarya, where dredging will also need to be done. The study will provide recommendations on what to do to minimize the physical-chemical, biological, social, and traffic impacts, including how to monitor them during preconstruction, construction, and post-construction.

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Tampilan pencitraan satelit lokasi Terminal LNG yang akan dibangun di kawasan khusus mangrove Taman Hutan Rakyat Ngurah Rai di Desa Sidakarya, Bali.

The relocation of the LNG terminal in the Sidakarya area is an effort to realize national energy security, especially in meeting electricity needs in Bali and eastern Indonesia, including for the resilience of Bali tourism in the future. This is in accordance with the government program for Bali Province to be using green energy by 2030.

For that to happen, the province will need to continue building environmentally friendly power plants with the support of the LNG terminal.

Delaying the Energy Transition

Meanwhile, Greenpeace Southeast Asia-Indonesia’s Regional Climate and Energy Campaign Coordinator Tata Mustasya believes that the energy transition should be carried out with a direct leap from fossil energy to clean and renewable energy. Among the options are solar energy, which has abundant resources but is not being widely used yet.

“The transition to gas will not only not solve the climate crisis due to carbon emissions, although emissions from gas are lower than coal, for example, it will also delay the energy transition, which could take decades,” said Tata. 

The use of LNG will close the space for the use of clean and renewable energy, as is currently the case with coal. As a source of electricity, he continued, Indonesia has 207 Gigawatts (GW) of solar energy potential, but only about 0.1 GW has been used.

“Bali should also make an energy transition from coal-fired power plants to clean and renewable energy, but instead plans to transition to gas. Even though Bali has abundant solar energy potential.”

According to Tata, the cost of solar energy generation has fallen 90 percent over the past 10 years so that in some countries in Southeast Asia it is already lower than coal.

In Indonesia, a conducive incentive policy can make the economics of solar energy even better than coal and gas power plants.

He hopes that the government’s policy of choosing LNG as a transitional energy will not lead to delays in energy transition like those experienced under the coal oligarchy.

Avoid Environmental Conflict

Separately, Natural Resources Law Observer Ahmad Redi agreed that it is time for Indonesia to leave fossil energy and switch to new renewable energy. However, this new renewable energy cannot be used immediately, so there needs to be a transition.

Although the government took the policy to make LNG as a transitional energy, it must still prioritize environmental interests.

Developing LNG as a power source should not come with environmental risks such as damaging mangrove areas, protected areas and conservation areas, he said.

“So, LNG energy sources should be avoided in places that have the potential for massive environmental damage. For example (LNG terminals) in Bali must be considered again whether there is the potential for massive damage if it is still attempted,” he said.

But if it is still attempted, the place must also be able to control the impact of environmental damage.

“I think the environmental impact analysis must be done properly, so that the social, environmental and economic impacts can be calculated in the context of a good environmental economy,” the Tarumanegara University Law lecturer said.

“There should not be an LNG terminal [if] the environmental cost is high because it is not based on environmental interests. That would be a burden to the state.”

Meanwhile, marine biology expert Muhammad Zainuri, a professor at the Oceanography Department of Diponegoro University, said that although lower than fossil energy, LNG also produces carbon emissions.

“If CO gas is not captured by green areas, it will accumulate in the air and will form ions, molecules and atoms that fall with rain,” said Zainuri. 

That may cause the sea to become more acidic and affect marine life as well as decrease photosynthesis, which would also affect water quality and temperature.

“If the temperature rises, the humidity will decrease. Humidity is the O2 and water content in the air that our bodies need. That’s why environmental experts disagree with the LNG project on the beach,” he explains.

Reducing Biodiversity

If photosynthesis is hampered, there will be less food for shrimp and fish fry, who may also fail to metamorphose, lay eggs and reproduce because of higher water temperature. That will also mean reduced populations of marine life in the area. 

“If the water is hot, the sea becomes hotter and the amount of carbon increases. So there are two pressures so that life (in the ocean) is reduced,” he said.

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LNG Terminal Development in Southeast Asia as per CEED study

LNG Infrastructure Development

Currently, the Indonesian government is focusing on increasing people’s access to electricity in all corners of Indonesia. The Indonesian government has targeted a national electricity program of 35,000 MW. Of the 35,000 MW, 38% of the electricity supply comes from gas with a capacity of 1,009 MMSCFD. 319 MMSCFD of gas is required to meet the electricity demand in eastern Indonesia. To overcome the challenge of delivering gas to power plant locations that are scattered and there is no pipeline gas network, natural gas needs to be converted into LNG to make it easier to reach the location of the power plant.

The government has built some LNG-based power plant infrastructure. The plan for infrastructure development is growing, with the planned construction of LNG/mini LNG facilities and the auction of LNG facilities, both in the Sumatra region, Central Indonesia, and Eastern Indonesia.

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The Ministry of Energy and Mineral Resources has encouraged the construction of mini LNG terminals using truck transportation for remote areas not covered by pipelines since 2018. In 2020, PT Perusahaan Gas Negara Tbk (PGN) collaborated with PT Perusahaan Listrik Negara (PLN) to provide LNG supply and infrastructure development in 52 PLN power plant locations throughout Indonesia.

Tutuka Ariadji, director general of oil and gas at the Ministry of Energy and Mineral Resources, said that the government offers ease of doing business and supporting facilities for investors, ranging from regulations, licensing, to fiscal and non-fiscal incentives to contribute in developing gas reserves. Currently, the largest gas consumers in Indonesia are industry, electricity, and fertilizer. Around 22.57% is exported in the form of LNG, and 13.13% is exported through pipelines. Total gas consumption reached 5,734.43 BBUTD. 

To maintain energy security, Indonesia targets natural gas production of 12 BSCFD by 2030. Based on the Indonesian Gas Balance Sheet, it is estimated that there is a potential surplus to supply the needs of new industries in the country or for export. To meet domestic demand, especially for industry and power generation, the Indonesian government continues to increase infrastructure development, such as gas pipelines. 

In addition, the development of small-scale and virtual LNG pipelines is also important to secure energy supply in certain areas with geographical constraints, such as on scattered small islands, especially in the eastern part of the country.

CEED’s study report on “Financing a Fossil Future, Tracing the Money Pipeline of Fossil Gas in Southeast Asia” revealed that Thailand and Indonesia are at the top of gas plant expansion. PT Perusahaan Listrik Negara (PLN) has the largest number of gas power plants that have been built and proposed in Southeast Asia from 2016 onwards. Its 19 plants accounted for 67% of the total power plant construction using fossil gas. 

“Gas development is progressing rapidly in SEA, more than five years since the adoption of the Paris Agreement in 2015. This is because financial institutions are building reputations as enemies of climate and clean energy, rather than improving their energy and sustainability policies,” said Gerry Arrances, executive director of CEED said.


This story was published through the support of a joint ASEAN LNG Journalism Fellowship between Climate Tracker and the Center for Energy, Ecology, and Development