Industries demand lower price of gas from Masela project
Thursday, September 28 2017 - 03:23 AM WIB
Fertilizer and petrochemical companies are demanding a much lower price of gas from the Masela block project in Maluku to be developed by Inpex Corp to ensure competitiveness of their planned fertilizer and petrochemical projects in the province.
Minister of Industry Airlangga Hartarto said in a statement obtained Thursday that the companies including state-owned fertilizer giant PT Pupuk Indonesia, PT Elsoro Multi Prima, and PT Kaltim Metanol Industri/Sojitz have proposed for a new gas price formula based on products, instead of a fixed price system.
The new price formula will allow the base price of gas from Masela block to be set at around US$3 per mmbtu, much lower than the estimate of the Ministry of Energy and Mineral Resources (MEMR) at $5.86 per mmbtu, Airlangga said.
He said that if the gas price can be lowered to around $3 per mmbtu, the aforementioned companies will be interested to absorb the gas from the Masela block at a volume of 474 mmscfd as designated by the MEMR.
He added that the ministry has submitted the new price formula proposal, which he also hopes to be applied for gas from Bintuni in West Papua Province, to the Ministry of Energy and Mineral Resources.
He said that petrochemical industry is one of the strategic industries in the country that must be supported including providing cheaper gas price to help bolster their competitiveness.
Editing by Reiner Simanjuntak