Government will form a special committee on gas sales

The government will soon form a special committee to establish a policy on the sales of the country?s gas to ensure that the domestic gas buyers will be able to receive sufficient supply despite the increase in the demand from overseas buyers, Koran Tempo reported on Tuesday.

Iin Arifin Takhyan, the director general of oil and gas at the Ministry of Energy and Mineral Resources, said in Jakarta on Monday that the committee, which would be headed by Minister of Energy and Mineral Resources would also comprise of BPMIGAS, the government?s agency in charge of oil and gas exploration and production, and experts.

Besides determining the gas marketing policy, the committee would also work to facilitate the gas sales, Iin said. "The committee will decide where the gas will be sold and determine their prices. With this mechanism, the government and producers (production sharing contractors) will have their parts," he added.

In the past the sales of gas was handled by Pertamina as the representative of the government. The removal of Pertamina?s exclusive rights including the rights to sell the gas following the introduction of the new law last year , however, has caused confusion. Pertamina demands to retain the rights while producers demands also to be involved in the sales process.

Iin said that the new committee would sell the gas through an auction process. "Pertamina or other gas producers (production sharing contractors) may join the tender," he added.

According to Arifin, the establishment of the committee is needed to ensure that the local buyers would not be neglected amid the increase in the overseas demand. At present, many gas producers prefer to sell their gas to overseas buyers due to higher prices. Local gas buyers mostly fertilizer producers which buy gas at subsidized prices have often been neglected. (*)