Jangkrik GSPA postponed due to reference price

By Febry Silaban

Upstream authority SKK Migas is withholding permit for Italian firm Eni Spa and state owned oil and gas firm PT Pertamina to sign Gas Sales and Purchasing Agreement (GSPA) for the Jangkrik gas due to disagreement over reference price, according to sources.

The sources said Eni and Pertamina want to use the Japan Crude Cocktail (JCC) price index as reference for the price of gas from Jangkrik fields, while SKK Migas wants the firms to use the Indonesian crude oil?s Realized Export Price (REP) index as reference.

Both firms initially planned to sign the GSPA during the recent 39th IPA convention, but the plan was not materialized due to the absence of greenlight from SKK Migas.

When asked for confirmation, Arief Riyanto, former Head of Gas Commercialization at SKK MIgas, refused to explain the reasons behind SKK MIgas? refusal to give greenlight for the GSPA.

?Starting today, I have been given a new assignment as project management division head. With regards the postponement of the Jangkrik GSPA, I can?t give you any info because the reason is very internal,? he said.

Didik Sasongko, VP for LNG, Gas & Power at Gas Directorate of Pertamina, said Pertamina and Eni are still waiting for approval from SKK Migas and the Ministry of Energy and Mineral Resources for the GSPA.

?The GSPA is being finalized. Hopefully, it will be finalized soon,? he said.

Under the planned GSPA, Pertamina will buy 1.4 mtpa of gas from the Jangkrik and Jangkrik Northeast fields, the amount of domestic allocation that has been agreed upon by the Italian firm and the government. However, Pertamina?s officials have said the firm is seeking to increase the domestic allocation to 2.4 mtpa.

The Jangkrik project is expected to come onstream in 2018 with a combined volume of 450 mmscfd, which is equivalent to 3.137 mtpa of LNG.

Editing by Johannes Simbolon