JAKARTA: Three gas-purchase agreements with a potential additional state revenue of Rp 7.4 trillion ( US$544.66 million ) were signed on Wednesday, in a bid to meet domestic demand in the fertilizer industry and power plants.
The signing of the agreements coincided with Wednesday’s opening ceremony of the 41th Indonesian Petroleum Association ( IPA ) Convention and Exhibition at the Jakarta Convention Center ( JCC ).
“The signing of these agreements is concrete evidence of the upstream oil and industry’s support to prioritize natural gas allocation for domestic needs,” said upstream oil and gas special unit ( SKK Migas ) spokesperson Taslim Z. Yunus.
For the fertilizer industry, upstream oil and gas company ConocoPhillips ( Grissik ) will supply 70 million cubic feet per day ( mmscfd ) of gas to Palembang-based fertilizer company Pupuk Sriwijaya for five years. Potential state revenue from this deal reaches $470 million.
Meanwhile, Medco E&P Indonesia amended its contract with Meppo-Gen to supply gas to the Mount Megang power plant in Muara Enim, South Sumatra. The contract amendment increases the gas supplied from 9,126 billion British thermal units per day ( BBTUD ) to 15,686 BBTU.
The two-year contract poses $68.52 million in state revenue, Taslim explained.
Medco E&P will also supply 1.3 to 1.6 BBUTD of gas to Petrogas in Ogan Ilir, South Sumatra, up to Dec. 31, 2019, with $6.14 million in potential revenue for the state.
Since 2003, domestic gas allocation has increased by an average of 9 percent per year. In 2015, natural gas used to help meet domestic demand reached 3,882 mmscfd or 56 percent of the total gas allocation, exceeding the 3,090 mmscfd exported volume or 44 percent of the gas allocation.
