JAKARTA: The government expects to see additional income from the gas sector following the signing of six new gas sale and purchase agreements between producers and domestic buyers, according to the oil and gas regulator.
Upstream Oil and Gas Regulatory Task Force (SKKMigas) chairman Amien Sunaryadi said the six agreements would provide the state with a total of US$587 million from its share of the production-sharing contract in each of those gas blocks.
“Of the total, three contracts are for electricity usage, two for industry and another one is an agreement for the supply of liquefied petroleum gas,” Amien said.
The deal on electricity involves PetroChina International Jabung Ltd. and state electricity firm PLN in Batam in a contract for between 10 and 17 billion British thermal units per day (bbtud) of gas worth $323.9 million. The contract will be valid for seven years and three months.
Meanwhile, Energy Equity Epic (Sengkang) Pty Ltd. sealed an agreement with regional-owned firm Perusahaan Daerah Sulawesi Selatan for a-four-year-contract to supply around 40 to 68 bbtud. The contract will deliver $176.77 million in state income.
Also signed was an amendment of a gas sale and purchase agreement between PT Pertamina EP and PT Pura Daya Prima to supply 3.8 million standard cubic feet per day (mmscfd) over a-four-year-period. The contract will give $7.2 million to the state.
In another deal, Pertamina EP signed an agreement with its parent firm PT Pertamina for the sale of flare gas amounting to around 3 to 8 mmscfd over a five-year-period. The agreement will contribute $4.2 million to state revenues.
“The agreement involves flare gas from Pondok Tengah field, Pondok Makmur field and Tambun field, which are Pertamina EP’s assets in Area 3,” Pertamina vice president for corporate communication Wianda Pusponegoro said.
The joint operating body Pertamina-PetroChina East Java entered an agreement with PT Gresik Migas for the delivery of between 1.2 and 3.2 mmscfd gas over a-four-year-period. The deal is estimated to provide the state with $6.9 million.
The other deal involved ConocoPhillips Indonesia’s commitment to supply 230,000 tons of liquefied petroleum gas (LPG) to Pertamina for a one-year period.
The deal is projected to earn the state $68 million.
The government has been trying to increase the utilization of gas by domestic buyers, partly to reduce the country’s dependency on oil-based fuels.
The country is estimated to have a significant amount of gas resources and reserves. However, as domestic demand is low and poor infrastructure hinders delivery, most of the gas is sent abroad as LNG.
SKKMigas is seeking to achieve domestic gas utilization of 4,403 bbtud, or equal to 61 percent of total output this year.
Also as part of the efforts to encourage domestic gas utilization and to boost economic growth, the government introduced earlier this month a plan to cut the gas price as an incentives for industry.
The reduction in price comes about as a result of lowering the government’s take from the sale of gas. Thus, contractors in gas fields should be unaffected by the plan.
