TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Pertamina temporarily extends condensate supply to TPPI
PT Pertamina has decided to extend its agreement with PT Trans Pacific Petrochemical Indotama (TPPI), albeit for a short period, allowing the state oil and gas firm to supply condensate to the company for the next month
Change Size
P
T Pertamina has decided to extend its agreement with PT Trans Pacific Petrochemical Indotama (TPPI), albeit for a short period, allowing the state oil and gas firm to supply condensate to the company for the next month.
Pertamina's decision was made after its agreement, known as a 'tolling agreement', with TPPI expired on Wednesday, leaving TPPI without a supply of condensate.
Ali Mundakir, Pertamina's vice president for corporate communication, said the company would extend the agreement for three days and, then, it would consult with the Upstream Oil and Gas Regulatory Task Force (SKKMigas) on an extension until June at the maximum.
'During the one-month period, TPPI can carry on its operation while looking for other partners,' Ali said on the sidelines of the 38th Indonesian Petroleum Association (IPA) convention and exhibition.
'Our concern is that TPPI can continue production so it can pay its debts,' Ali added.
The tolling agreement is part of a peace agreement between Pertamina and TPPI following the latter's debt default in 2012. TPPI has debts of US$406 million owing to Pertamina.
TPPI's refinery, according to Pertamina's previous statement, is able to produce 1.5 million barrels of diesel oil and fuel oil as well as 36,000 tons of LPG.
It also can produce up to 530,000 tons of petrochemical products, such as paraxylene, benzene, orthoxylene and heavy aromatic. Therefore, the continuation of TPPI's refinery is deemed important for diesel and oil fuel supply and the petrochemical industry.
Ali said Pertamina wanted to continue its cooperation with TPPI but not under the tolling fee system.
Under the current tolling fee agreement, TPPI processes the condensate while the products are owned by Pertamina, which pays the processing fees to TPPI.
Pertamina, according to Ali, intends to sell its condensate to TPPI.
The tolling fee agreement has run for six months after becoming effective in November last year when TPPI's refinery in Tuban, East Java started processing condensate that could not be processed in Pertamina's refineries.
The condensate is part of the government's take. Under production sharing contracts of oil in the country, as much as 85 percent of production is the government's share while 15 percent is for contractors.
However, there are some types of crude oil that cannot be processed by Pertamina's refineries.
SKKMigas used to put the selling of its crude oil and condensate that could not be processed up for auctions. However, the oil and gas regulator has suspended all tenders after its previous chairman Rudi Rubiandini was involved in a bribery case with an oil trader.
SKKMigas' deputy for commercial control Widhyawan Prawiraatmaja said earlier that the condensate would be put up for auction should the TPPI contract not continue.
'We will hold an auction or carry out joint lifting with oil contractors,' he said.
