PLN says it is ready to buy gas from marginal fields

The government again invites oil and gas companies to develop marginal and old gas fields after state electricity company PLN says it is willing to buy gas from such fields at relatively higher prices.

Priyono, the head of regulatory body for oil and gas upstream operations BPMIGAS, said in Jakarta on Thursday evening that PLN?s willingness to buy gas from marginal and old fields at US$9 per million British Thermal unit (MMBTU) would give contractors enough margin to develop such fields.

According to him, the economic price for gas from marginal and old fields is around $7 per MMBTU. With PLN?s offering price of $9 per MMBTU, the development of marginal and old fields will be economically feasible, he added.

Many marginal and old but potential gas fields remain untapped because their development will not be feasible if the gas is sold at the same price with large gas fields.

PLN president director Dahlan Iskan said that the $9 per MMBTU price tag would not be too expensive because it would be still lower than the price of diesel fuel. ?The most important thing for us is we will receive enough gas for the existing power plants,? he added.

Meanwhile Bagus Sudaryanto, Pertamina EP?s director for operation, said that the price offered by PLN was quite attractive. ?Actually, the price tag between $5 and $6 per MMBTU is still economically feasible for marginal fields, as long as we don?t have to build the pipelines to deliver the gas,? he added. (godang/bernard)