PLN hopes to get Gajah Baru gas at $9.7-9.8 per mmbtu
Friday, October 12 2012 - 02:17 AM WIB
State-owned electricity company PLN hopes to be able to get gas from the Gajah Baru field in Natuna, Riau Islands, at a price of $9.7-9.8 per mmbtu.
PLN, which will use the gas for its Muara Tawar power plant in West Java, will not directly get the gas from the Gajah Baru field, operated by Premier, due to the lack of pipeline infrastructure facility. The company will instead get gas from ConocoPhillips?s Corridor Block under a gas swap deal approved by the government last year. The Corridor Block gas, which was dedicated for Singapore buyers, will be replaced with gas from the Gajah Baru field.
Under the original contract, PLN was supposed to receive 40 mmscfd of gas from the Gajah Baru field at a price of $9.7-$9.8 per mmbtu as had been agreed previously with upstream oil and gas authority BPMIGAS.
Head of PLN?s Fuel and Gas Division, M. Suryadi, however, told Petromindo.com Friday that the company for the time being will only get 10 mmscfd of gas. ?I don?t know yet what the (gas) price will be under the swap mechanism. Probably it will be the same with the price which has been agreed by BPMIGAS and PLN, at $9.7-9.8 per mmbtu,? Suryadi explained.
He said that the gas swap mechanism was put in place because PLN Batam has yet to complete the construction of the necessary pipeline network to distribute the Gajah Baru gas to West Java.
Suryadi said that while the Gajah Baru gas contract is a long-term contract, the gas swap mechanism will only be valid for 18 months in line with the expected completion of the construction of the gas pipeline to Batam.
He added that PLN is scheduled to sign the Gajah Baru gas sales and purchase agreement under the swap mechanism with the WNTS Premier Consortium next week.
Editing by Reiner Simanjuntak