Finance Ministry, Pertamina jointly set Badak processing fee

By Godang Sitompul

The processing fee at the Badak LNG plant in Bontang, East Kalimantan is set by state owned oil and gas firm PT Pertamina and the Directorate General of Finance and State Treasury at the Ministry of Finance, according PT Badak NGL, the operator of the country?s largest LNG plant.

?The authority to set the processing fee does not lie with PT Badak NGL but with Pertamina and the directorate general. For sure, since they are not among those who invested (to build the plant), they should set a reasonable fee which will become a state revenue,? Nanang Untung, President Director of Badak NGL, said.

Earlier, an industrial source said Pertamina has set the processing fee for the LNG plant at between 30 and 40 US cents per mmbtu, but Chevron Indonesia Company which plans to use the plant to process gas from its Indonesian Deepwater Development project in Makassar Strait into LNG starting 2017, considered the fee too high.

After 2017, the LNG plant will be transferred to the Indonesian government via the Ministry of Finance and Pertamina has been assigned to continue operating the plant and will get a processing fee for the job.

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