MEMR sets up Gas Committee

The Ministry of Energy and Mineral Resources (MEMR) has set up a Gas Committee which would help accelerate decision making process on domestic gas allocation, Bisnis Indonesia reported on Wednesday.

The paper quoted Head of the Performance Control Unit at the Ministry, Widhyawan Prawiraatmadja as saying that the Gas Committee was a follow up of the Oil and Gas Leaders Forum held in Bandung, West Java, in December.

?Every month the committee will discuss issues related to gas allocation,? he said, adding that decision making regarding gas allocation in the past had taken quite a long time.

Widhyawan added that during the Bandung meeting, the upstream oil and gas authority SKK Migas, state-owned oil and gas firm PT Pertamina, and state-controlled gas distribution firm PT PGN Tbk have agreed to resolve problems related to gas allocation. ?The objective is to prevent suspension of gas supply in a number of areas in the short term,? he said.

In addition the ministry will also review a number of regulations including MEMR Regulation No 19/2009 on open access, and MEMR Regulation No 3/2010 on gas allocation.

As has been previously reported by this portal, SKK Migas has set a target to increase gas utilization in the country by lifting the target of deliveries to domestic clients in 2015.

SKK Migas spokesman Rudianto Rimbono said that the regulator projected that domestic deliveries would increase by around 9 percent compared to 2014 target.

?In 2015, the commitment for domestic deliveries is expected to be around 61 percent [of total output],? Rudianto said.

Under the work plan and budget, this year gas output is targeted to be 6,592 million standard cubic feet per day (mmscfd). Given that domestic absorption is supposed to be 61 percent, the local market is expected to consume around 4,021 mmscfd in 2015 while the remaining will be sent overseas.

The total amount will also cover the output of liquefied natural gas (LNG) of 200 cargoes this year, of which as many as 58 cargoes will be delivered to the domestic market, according to Rudianto.

The government has been trying to increase the domestic absorption of gas, as part of an attempt to reduce the usage of oil fuel. SKKMigas had expected that 53.8 percent of total 2014 gas production consumed by domestic players, or around 3,686 mmscfd of the total estimated output of 6,853 mmscfd. (*)