No decision yet Bontang processing fee for Eni

By Febry silaban

Ministry of Energy and Mineral Resources has yet to decide on the processing fee payable by Italian firm Eni SpA to the Badak LNG plant in Bontang, East Kalimantan for processing the gas from its Jangkrik project into LNG, according to an industry source.

"Eni has sent a letter to the ministry, asking about the issue. But, it has not been answered yet by the ministry," the source said told Petromindo.com.

The source found it strange that the ministry has decided on the processing fee for the IDD project, despite the fact that the project has yet to be launched, but has not done so for the Jangkrik project, which is already under construction.

As reported on the portal on Wednesday, quoting a source, the ministry has decided to set the processing fee for the IDD project at 22 US cents per mmbtu.

When asked for confirmation, acting Director General of Oil and Gas I Gusti Nyoman Wiratmadja said that the Bontang LNG plant has already a rule of terms on liquefaction cost.

"Processing fee is a B-to-B issue. There shouldn?t be a problem. The capacity of Bontang plant is huge, more than enough for gas supply from Eni," Wiratmadja told Petromindo.com, adding that the fee is likely to be equal to the one payable by Total EP Indonesie or Vico Indonesia.

In 2017, the LNG plant will be transferred to the Indonesian government via the Ministry of Finance and the government has assigned state owned oil and gas firm PT Pertamina (Persero) to operate it and deserve a processing fee for the task.

At present, the plant is operated by Pertamina on a non-profit or at cost basis since it is jointly owned by several PSCs such as Pertamina (55 percent), Vico (20 percent), Total (10 percent) and JILCO (15 percent).

Editing by Johannes Simbolon