BPH Migas plans to lower toll fee of Arun-Belawan pipeline

By Godang Sitompul

Downstream oil and gas regulator BPH Migas plans to soon lower the toll fee of the Arun-Belawan gas pipeline, operated by PT Pertamina Gas (Pertagas), a subsidiary of state-owned oil and gas firm PT Pertamina.

BPH Migas Director for Natural Gas, Umi Asngadah said that the planned lower tariff comes following commitment from state-owned electricity firm PT PLN for more power plants in North Sumatra to use gas that would increase the utilization of the pipeline.

?It (the lower tariff) will soon be processed if PLN can commit for all (more) power plants in North Sumatra to use gas,? Umi told Petromindo.com Friday, but did not provide further details. Pertagas and PLN, which uses the pipeline to deliver gas for its power plants in North Sumatra, could not be immediately reached for comment.

BPH Migas in October of 2014 set the toll fee for the Arun-Belawan gas pipeline at US2.53 per mscf. While the fee was considered at the time as rather high, the regulatory body promised to review it after one year, once the operation and maintenance (O&M) costs have been known. In addition, during the first year of operation, only half of the capacity of the pipeline was utilized. With more capacity being utilized, the feel could be lowered. The O&M costs along with utilization rate, margin, and tax are seen as factors that affect the pipeline tariff.

The Arun-Belawan gas pipeline is an open-access facility, meaning that any party can use the pipeline to deliver gas as long as they pay toll fee to the owner, Pertagas.

Editing by Reiner Simanjuntak