Regulation: Procedures of stipulating prices and specified users of natural gas
Friday, July 1 2016 - 07:03 AM WIB
OF THE REPUBLIC OF INDONESIA
REGULATION OF THE MINISTER OF ENERGY
AND MINERAL RESOURCES
NUMBER 16 YEAR 2016
REGARDING
PROCEDURES OF STIPULATING PRICES AND
SPECIFIED USERS OF NATURAL GAS
BY GRACE OF GOD THE ALMIGHTY
THE MINISTER OF ENERGY AND MINERAL RESOURCES
OF THE REPUBLIC OF INDONESIA,
Considering:
That in the framework of implementing Presidential Regulation Number 40 Year 2016 regarding Natural Gas Pricing, it is necessary to stipulate a regulation of the Minister of Energy and Mineral Resources regarding Procedures of Stipulating Prices and Specified Users of Natural Gas;
In view of:
1. Law Number 22 Year 2001 regarding Oil and Natural Gas (Statute Book of the Republic of Indonesia Year 2001 Number 136, Supplement to Statute Book of the Republic of Indonesia Number 4152);
2. Law Number 3 Year 2014 regarding Industry (Statute Book of the Republic of Indonesia Year 2014 Number 4 , Supplement to Statute Book of the Republic of Indonesia Number 5492);
3. Government Regulation Number 35 Year 2004 regarding Upstream Oil and Natural Gas Business Activities (Statute Book of the Republic of Indonesia Year 2004 Number 123, Supplement to Statute Book of the Republic of Indonesia Number 4435) as already amended several times and the latest by Government Regulation Number 55 Year 2009 concerning the Second Amendment to Government Regulation Number 35 Year 2004 regarding Upstream Oil and Natural Gas Business Activities (Statute Book of the Republic of Indonesia Year 2009 Number 128, Supplement to Statute Book of the Republic of Indonesia Number 5047);
4. Government Regulation Number 36 Year 2004 regarding Downstream Oil and Natural Gas Business Activities (Statute Book of the Republic of Indonesia Year 2004 Number 124, Supplement to Statute Book of the Republic of Indonesia Number 4436) as already amended by Government Regulation Number 30 Year 2009 concerning the Amendment to Government Regulation Number 36 Year 2004 regarding Downstream Oil and Natural Gas Business Activities (Statute Book of the Republic of Indonesia Year 2009 Number 59, Supplement to Statute Book of the Republic of Indonesia Number 4996);
5. Presidential Regulation Number 68 Year 2015 regarding the Ministry of Energy and Mineral Resources (Statute Book of the Republic of Indonesia Year 2015 Number 132);
6. Presidential Regulation Number 40 Year 2016 regarding Natural Gas Pricing (Statute Book of the Republic of Indonesia Year 2016 Number 89);
7. Presidential Decree Number 121/P Year 2014 dated October 27, 2014;
8. Regulation of the Minister of Energy and Mineral Resources Number 19 Year 2009 regarding Piped Natural Gas Business Activities (State Gazette of the Republic of Indonesia Year 2009 Number 274);
9. Regulation of the Minister of Energy and Mineral Resources Number 06 Year 2016 regarding Provision and Procedures for Stipulating the Allocation and Utilization as well as the Price of Natural Gas (State Gazette of the Republic of Indonesia Year 2016 Number 316);
10. Regulation of the Minister of Energy and Mineral Resources Number 13 Year 2016 regarding Organization and Working Mechanism of the Ministry of Energy and Mineral Resources (State Gazette of the Republic of Indonesia Year 2016 Number 782);
To stipulate:
REGULATION OF THE MINISTER OF ENERGY AND MINERAL RESOURCES REGARDING PROCEDURES OF STIPULATING PRICES AND SPECIFIED USERS OF NATURAL GAS.
Referred to in this ministerial regulation as:
1. Natural Gas shall be a result of natural process in the form of hydrocarbon that is in the form of phase gas in pressure condition and at atmosphere temperature, which is obtained from oil and natural gas mining process.
2. Specified Natural Gas Price shall be the price of natural gas stipulated by the Minister for natural gas users operating in the field of fertilizer industry, petrochemical industry, oleo-chemical industry, steel industry, ceramic industry, glass industry and rubber glove industry or the revision thereof.
3. Specified Natural Gas User shall be natural gas user operating in the field of fertilizer industry, petrochemical industry, oleo-chemical industry, steel industry, ceramic industry, glass industry and rubber glove industry or the revision thereof.
4. Contractor shall be a business entity or permanent establishment stipulated to undertake the exploration and exploitation in a working area on the basis of production sharing contract with Special Working Unit Executing Upstream Oil and Natural Gas Business Activities.
5. Business Entity Holding Natural Gas Trading Business License shall be a business entity holding natural gas trading business license, which undertakes the trade of natural gas in specified commercial area with a view of obtaining profit.
6. Minister shall be the minister in charge of oil and natural gas affairs.
7. Director General shall be the director general assigned to formulate as well as implement technical policy and standardization in the field of oil and natural gas.
8. Special Working Unit Executing Upstream Oil and Natural Gas Business Activities hereinafter called SKK Migas shall be an executive element managing upstream business activities in the field of oil and natural gas on the basis of production sharing contract under the fostering, coordination and supervision of the minister.
(1) In the framework of implementing the utilization of natural gas, the Minister shall stipulate the price of natural gas.
(2) The natural gas pricing as referred to in paragraph (1) shall consider:
a. scale of economy of field;
b. domestic and international natural gas price;
c. purchasing power of domestic natural gas consumers; and
d. added value of the utilization of natural gas in the country.
In the case of the natural gas price as referred to in Article 2 being unable to fulfill the scale of economy of industry using natural gas and the price of natural gas at delivery point from contractor exceeding US$ 6/MMBTU, the Minister may stipulate a specified natural gas price for specified natural gas users.
(1) In order to secure the specified natural gas price, specified natural gas users shall submit application for the stipulation of specified natural gas price to the minister through the director general.
(2) The application for the stipulation of the specified natural gas price as referred to in paragraph (1) shall be submitted by enclosing:
a. recommendation from the minister in charge of industrial affairs;
b. basic of consideration about the application, equipped by annual corporate report already audited;
c. document of the existing natural gas selling and buying contract.
(3) The recommendation as referred to in paragraph (2) letter a shall contain at least:
a. name of company using natural gas;
b. categorization of industry;
c. consideration related to added value which may be granted by natural gas user;
d. economic feasibility.
(1) The Director General shall verify the application for the stipulation of the specified natural gas price as referred to in Article 4.
(2) The verification as referred to in paragraph (1) shall be applied to the purchasing price of natural gas at delivery point of contractor, kind of industry and rest of the state revenue.
(3) In the framework of the verification as referred to in paragraph (1), the Director General shall establish a team for the evaluation of application for the stipulation of specified natural gas price.
(4) The team for the Evaluation of Application for the Stipulation of Specified Natural Gas Price shall verify application of specified natural gas user by observing the calculation of state revenue issued by the Head of SKK Migas.
(5) Based on result of the verification, the Director General on behalf of the Minister shall accept or reject the application for the stipulation of specified natural gas.
(6) In the case of the application for the stipulation of specified natural gas price being acceptable, the Director General on behalf of the Minister shall stipulate the price of specified natural gas.
(7) In the case of the application for the stipulation of specified natural gas price being rejected, the Director General on behalf of the Minister shall submit notification to natural gas user submitting the application.
(1) In the case of the price of specified natural gas for specified natural gas users being already stipulated by the Minister, the price of natural gas purchased from contractor shall be adjusted.
(2) The adjustment to the price of natural gas purchased from contractor as referred to in paragraph (1) shall be applied to natural gas purchased by specified natural gas users:
a. directly from contractor; or
b. through business entity holding natural gas trading business license.
The business entity holding natural gas trading business license as referred to in Article 6 paragraph (2) letter b shall be adjust the price of natural gas sold to specified natural gas users in accordance with the adjustment to the price of natural gas purchased from contractor.
(1) Business entity holding natural gas trading business license, which does not adjust the price of natural gas sold to natural gas users in accordance with the adjustment to the price of natural gas bought from contractor as referred to in Article 7 shall be subject to administrative sanction.
(2) The administrative sanction as referred to in paragraph (1) shall consist of:
a. written warning;
b. freezing of natural gas trading business license; or
c. revocation of natural gas trading business license.
(3) The written warning as referred to in paragraph (2) letter a shall be issued 2 (twice) at the maximum with the time 30 (thirty) calendar days each.
(4) In the case of business entity holding natural gas trading business license still not improving the stipulated provision following the issuance of the written warning as referred to in paragragh(3), the Director General on behalf of the Minister shall freeze the natural gas trading business license.
(5) The business entity holding natural gas trading business license subject to the freezing of natural gas trading business license as referred to in paragraph (4) shall be given opportunity to abolish the committed violation or abide by the stipulated requirement in no later than 60 (sixty) calendar days following the stipulation of the freezing of the natural gas trading business license.
(6) In the case of business entity holding natural gas trading business license not abolishing the violation or abiding by the stipulated requirement following the expiration of the 60 (sixty) calendar day period as referred to in (5), the Director General on behalf of the Minister may revoke the natural gas trading business license.
(1) In executing the specified natural gas pricing as referred to in Article 4, the Head of SKK Migas shall calculate state revenue through coordination with the minister and the minister in charge of financial affairs.
(2) The calculation of the state revenue as referred to in paragraph (1) shall be done by setting the lowest price of natural gas at US$ 6/MMBTU with the offsetting account not exceeding US$ 2/MMBTU of the natural gas price.
(3) The calculation of the specified natural gas price as referred to in paragraph (1) shall not influence the amount of revenue becoming the right of contractor.
(4) Result of the calculation of state revenue as referred to in paragraph (1) shall be submitted in no later than March of the current year to the Director as the basis for the specified natural gas pricing.
(1) The Minister shall evaluate the specified natural gas pricing every year or at anytime by considering the domestic economic condition.
(2) In the evaluation of the stipulation of the specified natural gas price as referred to in paragraph (1), the minister shall establish a coordination team consisting of representatives from the ministry in charge of economic coordination affairs, ministry in charge of energy and mineral resources affairs, ministry in charge of financial affairs, and the ministry in charge of industrial affairs.
(3) Based on result of the evaluation as referred to in paragraph (1) , the specified natural gas pricing may be reviewed.
The ministerial regulation shall come into force as from the date of promulgation and be retroactive to January 1,2016.
For public cognizance, the ministerial regulation shall be promulgated by placing it in State Gazette of the Republic of Indonesia.
Stipulated in Jakarta
On June 16, 2016
THE MINISTER OF ENERGY AND MINERAL RESOURCES OF THE REPUBLIC OF INDONESIA
sgd.
SUDIRMAN SAID
Promulgated in Jakarta
On June 22, 2016
THE DIRECTOR GENERAL OF LEGISLATION OF THE MINISTRY OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA
sgd.
WIDODO EKATJAHJANA
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 916
The copy complies with the original text
THE MINISTRY OF ENERGY AND MINERAL RESOURCES
The Head of Legal Affairs Bureau,
Hufron Asrofi