PGN, PIM drop plan to buy Sonoro gas
Saturday, August 29 2009 - 02:23 AM WIB
State owned oil and gas firm PT Pertamina and its partner PT Medco Energi International, which own the project, set the wellhead price of the gas at US$6.6 per million british thermal unit (MMBTU). Including the delivery cost, the price could rise to $12 and $13 per MMBTU if delivered to Java, according to PGN?s President Director Hendo Prio Santoso said in Jakarta on Friday.
?At such a high price, it would be quite difficult to sell the gas,? Hendo said, adding that at present, PGN sells its gas at an average price of $5.6 per MMBTU.
Separately, PIM?s President Director Mashudianto said that the Aceh-based fertilizer producer had also cancelled its plan to buy gas from the LNG plant project due to the high price offered by Pertamina and Medco.
He also said that the firm does not urgently need gas from the project because the supply commitment from the Tangguh LNG plant and from Medco?s Block A gas field would be enough to meet the firm's gas need over the next 10 years.
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.
Several companies including PGN, PIM and state electricity company PT Perusahaan Listrik Negara (PLN) had expressed interest to buy the Senoro gas but asked a lower price than the one offered to Japanese buyers. (*)