BPMIGAS manages to raise gas price to PGN
Monday, May 7 2012 - 01:06 PM WIB
?We?ve managed to increase the gas prices more than 200 percent,? said BPMIGAS Public Relations, Security, and Formality Division Head Gde Pradnyana in Jakarta on Monday.
Conoco supplies 412 BBTUD, while Pertamina EP about 250 BBTUD. The gas was transported to the consumers of PGN in West Java through the South Sumatera--West Java pipeline. The price of the gas from Conoco was previously set at only US$1,85 per MMBTU, while the price of the gas from Pertamina EP was about US$2,23 per MMBTU.
The price increase of gas from the two producers is expected to raise state income by US$300 million or Rp 2.6 trillion in 2012.
Gde noted that before the increase, the price of gas sold from the two fields to PGN was considered as too low if compared with the prices of other gas from other fields. The average price of gas sold in domestic market has reached over US$6 per MMBTU.
BPMIGAS has asked all buyers of gas to review the prices set in their gas sale and purchase contracts. It has prioritized the gas contracts with big volumes but low prices.
?Tens of gas contracts for domestic and export markets had been renegotiated,? he said, adding that a number of them that had been approved would be signed in a ceremony that would also be attended by Energy and Mineral Resources Minister Jero Wacik on Tuesday (8th May 2012).
He said that the new higher prices were expected to become a reference, which will help the oil and gas upstream firms to review the economies of their oil and gas prospects and their already found reserves. Based on the new price, it is expected that those previously considered as not economic will be potential for development. ?That means the sustainability of gas supply will be more secured,? he added.
Previously, it was reported that BPMIGAS had secured the price increase of gas from ConocoPhillips to Petronas, Malaysia. The gas price sold from B Block in Natuna Sea, Riau Islands, to Duyong, Malaysia has been raised significantly. ConocoPhilips has sold the gas to Petronas since 2002 with a total volume of 263 BBTUD. With the increase, the Indonesian government is expected to see a significant increase of state income from Natuna gas until the gas contract ends in 2022.
Editing by Benget Besalicto Tnb.