SKK Migas says Pertamina, PLN reach agreement over JTB gas price

By Bernard Loebs

Petromindo|Khalsa

State-owned oil and gas firm PT Pertamina and state-owned electricity firm PT PLN have finally reached agreement for the price of gas to be produced from the Jambaran-Tiung Biru (JTB) field in Central Java.

Djoko Siswanto, Deputy for Procurement Control at SKK Migas, said on Tuesday that PLN has agreed to buy the gas from the JTB field at US$7.6 per mmbtu.

Pertamina has been engaged in months of lengthy negotiation process with PLN over gas price from the planned JTB project. Agreement of the gas price with PLN is crucial for Pertamina to start construction of the JTB project, initially targeted to be on stream in 2019 but has now been pushed back to 2020. PLN previously demanded a gas price of $7 per mmbtu, while Pertamina insisted that the gas price should be at least $8 per mmbtu to make the JTB project economically feasible.

Djoko said that Pertamina and PLN are currently making preparations to finalize the gas price agreement including signing of a gas sales and purchase agreement.

Meanwhile, Chairani Rachmatulah, a PLN director, declined to provide much comment. ?We?re close to agreeing on the price,? she said. President Director of Pertamina EP Cepu, Adriansyah said that the JTB gas price is still being discussed internally.

PT Pertamina EP Cepu (PEP Cepu) is the operator of the JTB project. The Tiung Biru field is located within PEP Cepu?s operations area which is adjacent to the giant Cepu oil and gas block jointly operated by ExxonMobil Cepu Limited (EMCL). The Jambaran gas field is located within the Cepu block. EMCL and PEP agreed in September 2012 to unitize both fields with PEP Cepu serving as operator.

Editing by Reiner Simanjuntak