Pertamina criticizes PGN over North Sumatra gas price
Thursday, November 12 2015 - 10:03 AM WIB
State owned oil and gas firm PT Pertamina (Persero) levelled criticism against IDX-listed state owned gas distributor PT Perusahaan Gas Negara (PGN) Tbk over the high gas prices in North Sumatra Province, accusing the latter of lacking transparency and openness.
Pertamina expects PGN to ?be more open and transparent in determining gas price for consumers in North Sumatra,? Pertamina?s spokesperson Wianda Pusponegoro said in a statement on Thursday.
The statement was issued in the wake of reports regarding complaints aired by gas consumers in North Sumatra over the price set by PGN for its gas. PGN reportedly set the price at US$14 per mmBtu ? quite a high price --, citing that it buys the gas from Pertamina?s Arun Regasification Terminal (better known as Arun Regas) in Aceh at $13.8 per mmBtu.
Wianda acknowledged that PGN pays Pertamina at $13.8 per mmBtu for gas from Arun, but PGN also gets gas from Pertamina?s Pangkalan Susu field in North Sumatra at the price of $8.31 per mmBtu. The volume of gas supply from Pangakalan Susu and Arun Regas is the same ? around 4 mmscd.
?With such composition, a business entity like PGN should carry out price blending based on volume-weighted average price. (PGN) stopped short of transparently explaining this to the public, which then created a misperception that the gas is only sourced from LNG and as such Pertamina has been discredited,? Wianda said.
She said if the prices of gas from Pangkalan Susu and Arun Regas are blended, PGN pays Pertamina less than $11 per mmBtu for the gas.
She noted that the gas from Arun Regas is supplied in the form of LNG from the Donggi Senoro LNG plant. Of the $13.8 per mmBtu selling price of the gas imposed by Pertamina on PGN, 85 percent is set by the government, including $2.58 per mmBtu in toll fee plus value added tax (PPN) and $1.58 per mmBtu in regasification fee plus PPN.
Editing by Johannes Simbolon