UPDATE 2: Vice Minister rebukes PLN over Tangguh deal
No approval yet for LNG price proposed by PLN: Priyono
Thursday, June 21 2012 - 09:48 AM WIB
Vice Minister of Energy and Mineral Resources Rudi Rubiandini has strongly criticized public utility PT Perusahaan Listrik Negara (PLN) for agreeing to buy LNG from the Tangguh plant in West Papua at above export price.
Rudi described the PLN-Tangguh agreement as a ?stupidity?
?When PLN agreed to buy Tangguh LNG at the price of US$13-$14 per mmbtu, it was (considered) a stupidity because aside from the fact (PLN) does not get (government) subsidies for the (purchase of) gas, the price is above (Indonesia?s) average export price,? Rudi told Petromindo.com.
PLN signed on May 24 a Memorandum of Understanding (MoU) with British Energy giant BP Plc, the leader of the Tangguh consortium, on LNG supplies from Tangguh to the former?s power plants in North Sumatra and Jakarta.
Under the MoU, PLN will get LNG supplies amounting to 230 mmscfd starting October 2013, comprising 110 mmscfd for its power plant in Belawan, North Sumatra and 120 mmscfd for its power plant in Jakarta.
Both parties refused to unveil the price during the signing ceremony.
In comparison, Rudi said, PT Nusantara Regas, the joint venture of PT Pertamina and PT Perusahaan Gas Negara, buys LNG for $11 per mmbtu for its floating LNG terminal, West Java FSRU. The FSRU, located offshore North Jakarta, is supplied with LNG from Badak LNG plant in Bontang, East Kalimantan.
Rudi said he appreciated Nusantara Regas for its ?bravery? to buy the fuel at such price level.
When contacted for comments, PLN?s President Director Nur Pamudji said PLN and BP had yet to sign any agreement on the price of Tangguh LNG.
?What we have signed is only an MoU. Since the signing of the MoU, nothing has been signed,? he said.
Suryadi Mardjoeki, Head of Oil Fuels and Gas Division at PLN, however said the electricity firm will buy Tangguh LNG at the price formula of 11 percent x ICP (Indonesian Crude Price) CIF. The price is still lower than its purchasing price of gas from West Java FSRU, which is set at the formula of 11 percent x ICP x (1+BOG) + alpha.
?You can count it yourself. If the ICP is $128 per barrel, BOG 4.8 percent, and the alpha $3.4, the final price will be $18.3 per mmbtu,? Suryadi said.
Meanwhile, R. Priyono, Head of upstream authority BPMIGAS, said his office had yet to receive an approval from Minister of Energy and Mineral Resources Jero Wacik of the Tangguh LNG purchasing price proposed by PLN.
?Under the existing regulations, the price should be approved by the minister. Until today, we have yet to receive the letter of approval," Priyono told Petromindo.
Editing by Johannes Simbolon