PEP Cepu says gas price from JTB project can?t be lower than $7
Friday, November 18 2016 - 05:11 AM WIB
PT Pertamina EP (PEP) Cepu said that the price of gas to be produced from the Jambaran-Tiung Biru (JTB) fields in East Java, could not be further reduced from the previously agreed US$7 per mmbtu.
PEP Cepu President Director Adriansyah told Petromindo.com that even at $7 per mmbtu, it is less than the price level desired to make the project economically feasible. ?Upstream projects have different risk and difficulty profiles,? he said, suggesting that the government should not set a single gas price for all upstream projects.
He said that the $7 per mmbtu price level has been agreed by the investors in the project and the Ministry of Energy and Mineral Resources.
Adriansyah made the comments in response to the government?s plan to lower gas price for certain industries to no more than $6 per mmbtu. Minister of Energy and Mineral Resources Ignasius Jonan said on Thursday that the government has decided that gas price for fertilizer, petrochemical and steel industries to not exceed $6 per mmbtu. The new price level would be effective starting January of next year. He said that the ministry would issue a new regulation on the new price of gas for the three industries. The government also plans to lower gas price for other selected industries.
PEP Cepu is the operator of the JTB project, which is expected to start gas production in the first quarter of 2019. The Tiung Biru field is located within PEP Cepu?s operations area which is adjacent to the giant Cepu oil and gas block jointly operated by ExxonMobil Cepu Limited (EMCL). The Jambaran gas field is located within the Cepu block. EMCL and PEPC agreed in September 2012 to unitize both fields with PEPC serving as operator.
State-owned electricity firm PT PLN is set to become the first buyer of the gas from the JTB project.
Editing by Reiner Simanjuntak