Pertamina, Medco agree to cut Donggi-Senoro gas price

State owned oil, gas firm PT Pertamina and IDX-listed energy firm PT Medco Energi International Tbk have agreed to cut the wellhead price of Donggi (Matindok)-Senoro gas in Central Sulawesi.

Director General of Oil and Gas at the Energy and Mineral Resources Ministry Evita Herawati Legowo said that producers had agreed to cut the wellhead price to "US$5 plus" per million british thermal unit (mmbtu) from $6.16 per mmbtu for domestic consumers.

But, potential domestic consumers of the gas had yet to agree it, she added.

In order to get the cheaper gas, the firms set a condition for buyers that the gas should be soon absorbed and buyers should involve in helping finance the project.

Last month, local companies have offered to buy gas from the Donggi-Senoro block at about $4 per mmbtu.

Evita Legowo earlier said that there were three companies who have voiced interest to buy Donggi-Senoro gas, that is state owned electricity firm PT Perusahaan Listrik Negera (PLN) (50 MMCFD), fertilizer firm PT Pusri (91 MMCFD) and PT Panca Amara Utama (70 MMCFD). The three could absorb 211 MMCFD of gas in the form of LNG. No firm commitment has been made by the firms who cited the price offered for the LNG was too high.

Pertamina and Medco plan to build a liquefied natural gas (LNG) plant in Central Sulawesi in cooperation with Japanese company Mitsubishi. Gas for the proposed plant will be supplied from Matindok-Donggi Block, which is operated by Pertamina, and Senoro-Toili Block, which is jointly operated by Pertamina and Medco.

The consortium initially planned to sell the LNG to Japanese buyers but the government decided recently that the gas from Matindok and Senoro-Tolli fields should be sold in the domestic market. (bernard)