Minister issues new regulation on gas price for power plants
Friday, August 4 2017 - 02:51 AM WIB
Petromindo
Minister of Energy and Mineral Resources Ignasius Jonan has issued new Ministerial Regulation No 45/2017, which is a revision of Ministerial Regulation No 11/2017 on gas utilization for power plants.
According to copy of the new regulation obtained by Petromindo.com on Friday, state-owned electricity firm PT PLN and independent power producers (IPPs) can buy pipeline gas at a ceiling price of 14.5 percent of Indonesia Crude Price (ICP). Under the previous regulation, the limit was set at 11.5 percent of ICP per mmbtu if the plants are not located at the wellhead.
In the case that the power producers can?t obtain pipeline gas at the aforementioned ceiling price, they can buy LNG (as long as they have access to LNG terminal and regasification facility), but the gas price at the power plant gate must be lower than the ceiling price of pipeline gas.
In the case that price of domestic LNG is equal to or cheaper than import (price of gas at plant gate), the power produces must buy from the domestic source.
If the above conditions can?t be achieved, the minister will determine gas provision policy for power plants.
The new regulation also says that the price of LNG (plant gate price) already include the cost of regasification and distribution, two items which were not mentioned in the previous regulation.
The new regulation also says that the cost of gas distribution via modes other than pipeline will be regulated or determined by the minister.
Regarding power plants located at the wellhead, the gas price is limited at 8 percent of ICP, the same condition as set under the previous regulation.
Editing by Reiner Simanjuntak