Director general says BPMIGAS can?t take over LNG plants

A senior government official said that oil and gas upstream authority BPMIGAS could not take over the operation of liquefied natural gas (LNG) facilities from state oil and gas firm Pertamina because it is not a business entity, Bisnis Indonesia daily reported Thursday.

?As a non-profit agency, BPMIGAS is prohibited from controlling assets. Doing so contradicts existing regulations,? the paper quoted director general of oil and gas Iin Arifin Takhyan as saying on Wednesday.

The Ministry of Finance owns existing LNG plants, Iin Arifin said.

The official said earlier that ownership of the LNG plants should be transferred to state oil and gas firm Pertamina, which will operate as an ordinary limited liability company.

Pertamina currently operates two state-owned LNG plants, one in East Kalimantan and another one in Aceh, in cooperation with area gas producers.

Recently, BPMIGAS vice chairman Kardaya Warnika said it wanted to control the existing LNG plants.

?BPMIGAS controlling the assets is a win-win solution. Production sharing contractors view that there would be unfair competition in the market if Pertamina controls the LNG plants,? Kardaya said.

Gas producers were worried that that Pertamina could charged them high fee for using the LNG plants to produce gas, Kardaya said.

Meanwhile, oil and gas expert Ramses O Hutapea said that the government must compensate Pertamina if the operation of LNG facilities was transferred to other parties.

Ramses argued that Pertamina had used loans from private lenders, and not state funds, to build the LNG plants, and that the company had paid off its debts with its own funds.

He said that BPMIGAS was a regulatory body as stipulated by the current oil and gas law which became effective last year. (*)