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Gas price cut won't affect LNG business: Donggi-Senoro
Staying firm: PT Donggi-Senoroâs Outer Containment LNG Tank nearing completion in Banggai regency, Central Sulawesi
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Staying firm: PT Donggi-Senoroâs Outer Containment LNG Tank nearing completion in Banggai regency, Central Sulawesi. The governmentâs plan to reduce gas prices is expected to make no negative impacts on the business activities of gas firms in the downstream side, including on Donggi-Senoro. (Kompas) (Kompas)
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span class="inline inline-center">Staying firm: PT Donggi-Senoro's Outer Containment LNG Tank nearing completion in Banggai regency, Central Sulawesi. The government's plan to reduce gas prices is expected to make no negative impacts on the business activities of gas firms in the downstream side, including on Donggi-Senoro. (Kompas)
Gas provider PT Donggi-Senoro LNG (DSLNG) has said the government's plan to reduce gas prices in Indonesia by up to 30 percent will not affect the company's businesses.
DSLNG president director Gusrizal said that as a downstream company, Donggi-Senoro was unlikely to suffer any negative repercussions from the government's gas price reduction plan. Instead, it was gas suppliers that would be affected by the policy.
'The impact will be felt more at the level of suppliers,' Gusrizal said in Jakarta on Monday.
Uncompetitive prices are the main reason for the government's plan to cut gas prices. As reported earlier, 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.
Earlier, Energy and Mineral Resources Minister Sudirman Said stated that the government would reduce gas prices by 30 percent through tangible steps.
"The government will adjust gas management from time to time to make it more favorable to national industry. We will continue to push down the gas prices, aiming for a decline of 30 percent," he said.
Sudirman further explained that on the upstream side, the government would try to lower gas prices by reducing gas allocations for the government.
At the midstream and distribution level, the minister said, the government would attempt to reduce gas prices by applying a regulated margin to allow transmission and distribution fees to be applied fairly. The establishment of the Gas Buffer Agency would guarantee the available supply of gas and ensure the gas price reduction with a simplified system, he added.
Sudirman further explained that it was believed that the reduction of gas prices would spur production growth on the downstream side and invite new investment in the upstream oil and gas sector.(ebf)(+)
