Pertamina seeks approval to buy uncommitted cargoes of Bontang LNG plant
Monday, November 13 2017 - 06:15 AM WIB
Petromindo|Boim
State-owned oil and gas company PT Pertamina is seeking approval of the Ministry of Energy and Mineral Resources to buy future uncommitted LNG cargoes from the Bontang LNG plant, operated by PT Badak NGL.
The company made the request in a November 7 letter of Pertamina Gas Director Yenni Andayani to Minister of Energy and Mineral Resources Ignasius Jonan, a copy of which was obtained by Petromindo.com on Monday.
According to the letter, a November 3 meeting attended by Pertamina, the minister, and the upstream authority SKK Migas decided that Pertamina, which holds 55 percent interest in Badak NGL, will not get fee from the gas processing carried by Badak. As compensation, Pertamina will be given rights to buy uncommitted LNG cargoes from the Bontang LNG plant in East Kalimantan Province.
Other shareholders of Badak NGL are VICO Indonesia (20 percent), Jilco (15 percent), and Total (10 percent). Set up in 1974, Badak NGL operates one of the world?s largest LNG plants with eight LNG trains and production capacity of 22.5 million tons per annum of LNG.
According to minutes of a November 6 meeting chaired by Deputy Minister of Energy and Mineral Resources Arcandra Tahar, the ministry has decided to ask the State Asset Management Agency (LMAN) to re-appoint Badak NGL as the operator of the Bontang LNG plant after 2017, without operator fee due to lingering disagreement between LMAN and Pertamina over the fee, and to help ensure the operation of the Bontang LNG plant.
The meeting also opens opportunities for new gas producers to process their output at the Bontang LNG plant.
Meanwhile, LMAN has also requested for a golden share in Badak NGL as long as it is in accordance with existing regulations. SKK Migas wants to be given a seat at the board of commissioners of Badak NGL to help ensure proper supervision of the operation of the Bontang LNG plant.
Editing by Reiner Simanjuntak