Minister raises Conoco gas price for PGN

Minister of Energy and Mineral Resources Ignasius Jonan has raised the price of gas from the Grissik field in Corridor block, South Sumatra, operated by ConocoPhillips Indonesia Grissik Ltd, sold to IDX-listed gas distribution firm PT PGN Tbk, Kontan reported on Friday.

The paper said that while the price of gas for volume of up to 27.26 bbtud remains at US$2.6 per mmbtu, the price for gas volume of 27.27 bbutd-50 bbtud has been raised to $3.50 per mmbtu from previously $2.6 per mmbtu, according to Minister Letter No 5882/12/MEM/2017 on Conoco gas price for PGN.

The new price is valid until the gas sales and purchase agreement between Conoco and PGN expires in 2019.

The paper said that despite the higher price at the upstream level, PGN is not allowed to increase the selling price for its customers, which are power plant operators including PLN Batam supplying electricity in Batam.

Jonan, however, declined to comment on the letter. Oil and Gas Upstream Director at the ministry, Tunggal also declined to comment.

A source told the paper that the minister increased the gas price as the Conoco gas price has been relatively lower than gas price charged by other contractors. This is also meant to help ensure gas supply for PGN. (*)