Minister issues regulation on flare gas
Monday, May 15 2017 - 01:04 AM WIB
Petromindo
Minister of Energy and Mineral Resources Ignasius Jonan has issued Ministerial Regulation No 32/2017 on the utilization and selling price of flare gas in upstream oil and gas activities.
The objective of the new regulation is to reduce flaring volume and greenhouse gas emission in upstream activities.
According to a copy of the regulation, obtained by Petromindo.com, the flare gas can be used for power generation, pipeline gas for industries/households, compressed natural gas, LPG, and dimethyl ether production, or other purposes.
Upstream authority SKK Migas will offer the flare gas potential to the buyers by publishing data on flare gas potential of the upstream oil and gas contractors.
In case there are more than one buyers, SKK Migas will propose the buyer to the Minister based on evaluation results of flare gas potential offering team.
In case there is only a single buyer, SKK Migas will make direct appointment and recommend it to the Minister.
In case there is no interested buyer to the offer made by SKK Migas, or the price offered by the potential buyer does not meet the price set in the formula, the Minister can assign state-owned or local government-owned company, or private-owned firm with the required capacity as the buyer.
The Minister determines the selling price of the flare gas based on recommendation made by SKK Migas. The selling price for state-owned company is set at a limit of US$0.35 per mmbtu, without price escalation.
Editing by Reiner Simanjuntak