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State oil and gas producer PT Pertamina expects to conclude its program to convert households across the nation from kerosene to liquefied petroleum gas for cooking by mid-2010.

During a ceremony on Monday to mark 40 million households switched to LPG, Pertamina announced that 6.3 million kiloliters of kerosene had been replaced by 1.9 million tons of LPG across 13 provinces.

Hanung Budya, the company’s deputy director of marketing, said kerosene had been totally replaced in Jakarta, West Java and Yogyakarta, while 10 provinces had been almost completely converted. In Central Java, the program has reached 97 percent of households, East Java 84 percent and Bali 97 percent.

“We expect the program to be wrapped up in Java and Bali at the end of this year or by January-February next year at the latest,” Hanung said.

The government launched the program in 2006 to reduce spending on fuel subsidies by swapping kerosene for cheaper LPG.

The completion date for the project had been pushed back to 2011, but the process was accelerated at the urging of Vice President Jusuf Kalla this year.

The program has cost Rp 9.3 trillion ($986 million) and is estimated to have cut fuel-subsidy spending by Rp 10.7 trillion since it launched in 2006.

So far this month, Pertamina has distributed 82.25 million three-kilogram cylinders and 44.7 million stoves.

Nationwide LPG consumption is forecast to jump this year by about 50 percent to three million tons as Pertamina continues to roll out the conversion program.

But the company has failed to meet its annual targets, achieving 75 percent at best.

Pertamina is also working with oil and gas producer PT Arrtu Mega Energie on a joint venture to build dimethyl ether plants in Peranap, Riau, and Eretan, West Java, at a cost of $1.9 billion. The fuel would eventually be used to cut LPG imports, necessitating yet another conversion program.

The Riau plant would process low-grade coal into methanol, which would then be reprocessed into dimethyl ether at the Eretan plant. The facilities are expected to have an annual capacity of 1.7 million tons each, said Christoforus Richard, AME’s president.

AME will take an 80 percent stake in the facilities, with Pertamina holding the balance. Construction of the plants is set to start this year, with completion due in 2011.

Pertamina is currently conducting trials on dimethyl ether, and is distributing free stoves that burn the fuel to 300 households and 150 small businesses in North Jakarta, as well as three-kilogram gas canisters containing a mix of 80 percent LPG and 20 percent dimethyl ether.

With LPG demand expected to amount to some three million tons this year, Pertamina will supply a third with the rest coming from imports and foreign companies based in Indonesia, such as PetroChina.