Five GSPAs signed today: SKK Migas

Five gas selling contracts for the supply of gas to domestic buyers have been signed today in a ceremony witnessed by ad interim Minister for Energy and Mineral Resources Chairul Tanjung.

Acting Chairman of upstream oil and gas regulator SKK Migas, J. Widjonarko said in a statement that the five gas sales and purchase agreements (GSPAs) would provide additional potential revenue of up to US$10.5 billion to the state.

The five gas selling contracts include the following.

The first is GSPA between the Tangguh LNG plant operator and state-owned electricity firm PLN for the supply of an estimated 400 cargoes of LNG for 19 years to the latter?s power plants across the country to replace oil fuel.

The second is gas selling contract signed by PHE Simenggaris, Medco Simenggaris, and PLN for the supply of 0.5 mmscfd of gas for power generation in Tana Tidung Regency, North Kalimantan, where the Simenggaris gas working area and production facility is located.

The third is the first amendment of a five-year GSPA between PC Ketapang II Ltd, Petronas Carigali (Ketapang) Ltd, and PT Petrogas Jatim Utama for the supply of an estimated 12-50 mmscfd of gas for power generation in East Java. The gas will come from the Ketapang working area.

The fourth is amendment of GSPA between state-owned oil and gas firm PT Pertamina and Kaltim Pasific Amoniak for the supply of 65 bbtud of gas to East Kalimantan-based ammonium plant until end of December of 2019. Following the amendment, the state will obtain additional revenue of US$370 million as a result in the increase in the price of gas, SKK Migas said.

Finally, the fifth is GSPA between Medco E&P and Meppo-Gen for the supply of 10 bbtud of gas to the Gunung Magan gas-fired power plant in Muara Enim, South Sumatra, for 21 months.

Widjonarko said that SKK Migas is committed to increase gas supply in the domestic market. Since 2003, gas supply in the domestic market has increased by an average of 9 percent per year. This year, about 3,981 bbtud of gas has been committed to be supplied to the domestic market, higher than the commitment made for export at 3,416 bbtud, he said.

Widjonarko, however, lamented that the toughest challenge in realizing the domestic market gas commitment is the lack of gas infrastructure facilities at home.

Editing by Reiner Simanjuntak