PT Perusahaan Gas Negara Tbk (PGN) signed the second phase of the Letter of Agreement (LoA) held by SKK Migas on Wednesday (3/6). This was done as a form of implementation of the Decree of the Minister of Energy and Mineral Resources number 89 of 2020 concerning Users and Prices of Natural Gas in the Industrial Field and the Decree of the Minister of Energy and Mineral Resources 91.K / 2020 concerning the Price of Natural Gas in Power Plants (Plant Gate). In this agenda also witnessed ESDM Minister Arifin Tasrif, SKK Migas Head, KKKS representative, and Buyer's representative.
The PGN Group includes Pertamina Gas (Pertagas) and Pertagas Niaga (PTGN) which are affiliates of the gas holding sub-sector as one of the buyers signing an LoA with PT Pertamina Hulu Energi (PHE) which acts as a seller on 4 contracts.
The contract includes LOA from the Ogan Komering Work Area in South Sumatra with the volume in accordance with Ministerial Decree number 89.K of 1.43 - 1.44 MMSCFD for utilization in the South Sumatra industry. The price of upstream adjustment from the initial price of US $ 8.27 / MMBTU to US $ 4.62 / MMBTU.
LoA from the Jambi Merang Region, with a volume in accordance with Minister of Energy and Mineral Resources Decree number 91.K / 2020 of 35 BBTUD for utilization in the electricity sector of western Java and Batam. The price of gas adjustments upstream is US $ 4.00-4.06 / MMBTU.
LoA from the North Sumatra Offshore Working Area for Industry and electricity in Aceh and North Sumatra. The volume distributed according to the Decree of the Minister of Energy and Mineral Resources number 89.K / 2020 is 8.5 BBTUD. The price of upstream adjustment from the initial price of USD 6.25 / MMBTU to USD 4-4.5 / MMBTU.
Blogger Agus Purnomo in PHE-WMO
Furthermore LoA from the West Madura Offshore Working Area (PHE-WMO) with volume according to Ministerial Decree number 89.K / 20 of 19 BBTUD for utilization in the industrial sector in East Java. During the period up to December 2021, the upstream gas adjustment price was USD 5.33 per MMBTU. Furthermore, until 31 December 2022, the upstream gas price adjustment was USD 4.5 per MMBTU.
In addition to the signing of the LoA with PT PHE, the PGN Group through PT Pertagas also carried out the signing of the LoA with PT Pertamina EP from the Pondok Tengah, Tambun and Pondok Makmur fields with a volume of 0.9 BBTUD with an upstream gas price of USD 4.5 / MMBTU. US $ 7.17 / MMBTU.
The price of natural gas is valid until the end of the time of the price adjustment of Natural Gas in the Decree of the Minister of Energy and Mineral Resources number 89K / 2020. The period for adjusting natural gas prices can be extended, if there is a further decision from the Minister of Energy and Mineral Resources.
"As a midstream businessman who distributes gas from upstream oil and gas to the gas user industry, the signing of the LOA agreement is a sign that we have bought at a lower gas price as stipulated in the Minister of Energy and Mineral Resources Regulation so that the price of gas in the industry is at the US $ 6 per MMBTU.
We believe that selling prices to industrial gas users lower than before will have a positive impact on increasing competitiveness for the national industry, "said PGN President Director Suko Hartono as the buyer's representative.
Furthermore, Suko explained that PGN projects that gas demand will increase so that it will encourage PGN to increase the capacity and reach of gas infrastructure. In addition, it will also have multiple impacts on industrial growth, growth of new economic points, downstream gas industry, and other positive impacts on the national economy. PGN has also prepared various technical provisions for the implementation of the Minister of Gas Price Decree which will be agreed with the customer.
Investor Daily, Page-10, Thursday, June 4, 2020
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