BPMIGAS, Pertamina still at odds over Bontang and Arun LNG plant assets

By Bernard Loebs

Upstream authority BPMIGAS said the Finance Ministry is yet to make a decision whether the assets of Bontang LNG and Arun LNG plants will be managed by BPMIGAS or state own oil and gas company PT Pertamina, spokesperson of BPMIGAS I Gde Pradnyana said.

He made the statement when asked by Petromindo.com about an interpretation that the Finance Ministry had made a decision that the two LNG plants assets worth around Rp29 trillion will be managed by Pertamina.

Gde said that since Pertamina changed its status to a limited company and BPMIGAS having been established and took over most of Pertamina earlier functions and authorities, which party will manage the LNG plants is to be reconsidered and decided upon. At present, those LNG Plants remain in ?status quo?. The production sharing contractors (PSCs) that deliver gas to the LNG plants are only charged with toll fees.

A source at Pertamina earlier told Petromindo.com that the Finance Ministry, which represents the State, has given authority to PT Pertamina to manage both Arun and and Bontang LNG plants. This means that the assets are owned by the state, while its operatorship is handed over to Pertamina. If this is the case Pertamina will have the right to charge toll fee to PSCs which process their gas at the LNG plants from this year on.

However, Petromindo.com's sources said that BPMIGAS has sent a letter to the Finance Ministry asking for clarification. Gde was sure that the Finance Ministry has not made any decision on that matter.

Gde said BPMIGAs wants the LNG plants to become upstream assets under the auspices of BPMIGAS. Pertamina wants those assets to become downstream assets managed by Pertamina. However, the Finance Ministry seems to want the LNG assets into a public service agency (BLU).

Gde said in principle those assets are owned by the State. The question now is which government institution they are registered to. If the assets are managed by Pertamina, BPMIGAS will have no rights to check the real operating cost components spent by the operator of those two assets, Gde said.

Arun LNG plant in northern Sumatera and Bontang LNG plant in East Kalimantan were built by consortium of production sharing contractors (PSCs) and LNG buyers. The two LNG plants would become the government's assets once the the investment fund spent have been fully paid back by the government to the investors building the plants. Such repayment is reportedly having been made in full by the government.

Editing by Roffie Kurniawan