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No gas price hike in sight, vows SKK Migas
The Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) says there is no government plan to raise upstream gas prices and supplies are sufficient to meet demand.
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T
he Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) has said there is no government plan to raise upstream gas prices.
In a press release published on Thursday, SKK Migas also stated that the supply of gas was sufficient to meet domestic needs, including pipeline gas supply in Sumatra as well as liquefied natural gas (LNG) in various regions.
It noted that excess supply could be transferred out of areas with a gas surplus, like East Java.
“Gas production nationwide exceeds the current domestic gas consumption, which amounts to approximately 67 percent of the available gas production,” SKK Migas programs and communications division head Hudi D. Suryodipuro was quoted as saying in the statement.
As outlined in the release, SKK Migas is working with the government to lower upstream gas prices through an evaluation process, fiscal policies and implementing specific gas price regulations as part of the government's policy for a lower gas price.
Hudi said the upstream oil and gas industry fully supported efforts to enhance domestic gas uptake.
He added that SKK Migas was poised to roll out six gas projects in the second half of 2023, collectively yielding around 394 million cubic feet per day (mmscfd). These projects, including optimization projects like Baronang Gas OPL, GBFCP Premier Oil, Seng Compressor, Segat Compressor, LTRO 18 Medco Grissik and MAC HCML, were set to go onstream.
Furthermore, the national gas supply was expected to see an increase through projects integrated within the national strategic projects, Hudi said, such as the Tangguh Train 3 project.
Domestic consumption would be prioritized in the allocation of gas from these endeavors as the government was committed to ensuring the security of domestic demand and addressing gas price disparities through reliable supplies, emphasized Hudi.
Previously, state-owned gas distribution company PGN had announced its intention to raise the gas price for regular industrial customers starting Oct. 1.
The hike would have required customers in these industries to pay between US$11.89 and $12.52 per million British thermal units (mmbtu), whereas the fare previously hovered between $9.16 and $9.78 per mmbtu, according to a summary made by FIPGB, a forum for industrial gas users.
On the other hand, PGN was awaiting clarity from regulators to secure more long-term gas supply.
PGN said it wished for SKK Migas to promptly provide clarity on the LNG supply it could get from Tangguh Train 3 to compensate for an expected decline in gas supply from other projects.
Highlighting those concerns, PGN president director Arief Setiawan Handoko said he was worried because of a recent 23 percent decline in gas supplies from PT Medco Energi Internasional’s Corridor Block to the company, dwindling to 400 billion British thermal units per day (bbtud) from the typical 520 bbutd.
Should a drop in supply from that project leave consumers short on gas, SKK Migas said, PGN would have to mix gas from the pipeline with liquefied natural gas (LNG) in the floating storage and regasification unit (FSRU) in Lampung to cover a dearth in quota.
