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Govt to cut N. Sumatra gas price next month
Lower costs: The Energy and Mineral Resources Ministry will reduce the gas price from oil and gas exploration areas, one of which is Tangguh, West Papua, which supplies liquefied natural gas (LNG)
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Lower costs: The Energy and Mineral Resources Ministry will reduce the gas price from oil and gas exploration areas, one of which is Tangguh, West Papua, which supplies liquefied natural gas (LNG). (tempo.co) (LNG). (tempo.co)
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span class="inline inline-center">Lower costs: The Energy and Mineral Resources Ministry will reduce the gas price from oil and gas exploration areas, one of which is Tangguh, West Papua, which supplies liquefied natural gas (LNG). (tempo.co)
The government is taking measures to reduce gas prices in North Sumatra to deal with the skyrocketing rise in the price of the commodity in the province.
The price of gas in North Sumatra has soared to US$14 per 1 million British thermal units (mmbtu), the most expensive of any region in the country. The price rise is reportedly due to the high cost of transmission and distribution, which is run by two state-owned enterprises, namely Pertamina and PT Perusahaan Gas Negara (PGN).
The Energy and Mineral Resources Ministry's director for oil and gas, IGN Wiratmaja Puja, said in Jakarta on Wednesday that the ministry was still drawing up formulas and various scenarios in a bid to cut gas prices in the province, from the upstream price to transmission and distribution.
"The gas price in North Sumatra will be cut by $2.50 per mmbtu. Currently the team is holding a meeting in Medan to discuss the price reduction. We expect that in December, it can be applied," Wiratmaja said.
He said that the $2.50 reduction would be carried out through cost efficiencies in the gas transmission.
"On Dec.10 that the gas price is expected to fall by $2.50 per mmbtu. The price reduction will be from the transmission cost efficiencies," Wiratmaja said, adding that the current transmission fee was about $2.53 per mmbtu while the distribution cost was $1.60 per mmbtu.
Wiratmaja further said that the ministry would also reduce the gas price from oil and gas working areas, one of which was liquefied natural gas (LNG) supplied from Tangguh, West Papua.
The government would cut the Tangguh upstream gas price from $8 per mmbtu to $6 per mmbtu, he said.
Earlier, PGN stated the high gas price for industrial customers was caused by the upstream gas price charged by Pertamina. The current purchase price of gas from Pertamina's regasification plant in Arun, Aceh, is $13.80 per mmbtu. Meanwhile, PGN sells to industrial customers in Medan, North Sumatra at $14 per mmbtu.
Pertamina said the increase in the gas price to PGN consisted of $2.58 per mmbtu in transmission fee and $1.58 per mmbtu in regasification costs. (ebf)
