Bontang processing fee too expensive for Chevron
Monday, September 16 2013 - 05:10 AM WIB
The processing fee of the Badak LNG plant in Bontang, East Kalimantan demanded by state owned oil and gas firm PT Pertamina is too expensive for PT Chevron Indonesia Company (CICO), according to an industrial source.
The source said Pertamina set the processing fee at between 30 and 40 US cents per mmbtu for any company who wants to process their gas into LNG at the plant, including CICO which is developing gas fields in Makassar Strait, ENI which is developing the Jangkrik field in Muara Bakau block and Vico.
CICO is developing a deepwater project in Makassar Strait, called the Indonesia Deepwater Development (IDD), which is expected to start production in 2017. The gas from the project will be sent to the Arun LNG plant where it will be converted into LNG before being shipped to buyers.
Beyond 2017, the source said the LNG plant will be transferred to the Indonesian government via the Ministry of Finance. Pertamina will be assigned to operate the plant and deserve a processing fee for the task.
At present, the plant is operated by Pertamina on non-profit or at cost basis since it is jointly owned by several PSCs such as Pertamina (55 percent), Vico (20 percent), Total (10 percent) and JILCO (15 percent)
Editing by Johannes Simbolon