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Jakarta Post

Take it or leave it, SKKMigas tells Industry Ministry

  • Viriya P. Singgih

    The Jakarta Post

Jakarta   /   Wed, January 10, 2018   /   08:09 pm
Take it or leave it, SKKMigas tells Industry Ministry This infographic shows Masela gas use in the petrochemical industry. (The Jakarta Post/file)

The Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) has warned that it will find buyers by itself for gas produced from the Masela block in the Arafura Sea if the Industry Ministry still insists on asking for a further price cut.

The Industry Ministry has repeatedly called on SKKMigas to allow industrial players to buy Masela’s gas for a price of US$3 per million British thermal units (mmbtu), while the Energy and Mineral Resources Ministry has stated that the ideal price is $5.86 per mmbtu.

“If the companies [recommended by the Industry Ministry] are only willing to buy the gas at $3 per mmbtu, SKKMigas will find other buyers by ourself. We already have a prospective buyer from Teluk Bintuni [in West Papua] that is set to offtake the gas with an indicative price of $5.2 per mmbtu,” Amien said Tuesday.

The Industry Ministry has previously proposed three companies to be the off-takers for gas produced at Masela, namely state-owned fertilizer producer PT Pupuk Indonesia, petrochemical firm PT Elsoro Multi Pratama and plastic product company PT Sojitz Indonesia, with a total demand of 474 mmscfd.

However, Amien accused the three companies of seeking a chance to act as middleman to resell Masela’s gas at higher prices.

“We won’t sell Masela’s gas to such middlemen,” Amien said.

Masela, jointly operated by oil and gas giants Inpex and Royal Dutch Shell, is estimated to start producing 150 million standard cubic feet per day (mmscfd) of natural gas in 2027. (bbn)