by: Nurbaiti
JAKARTA: The Ministry of Energy and Mineral Resources (ESDM) hopes the sale prices of gas from Donggi-Senoro field, Central Sulawesi, offered to domestic as well as foreign buyers can be competitive.
Minister of Energy and Mineral Resources Darwin Zahedy Saleh revealed he had approved to allocate 72% of gas from Donggi-Senoro field or 300 BBTUD to be exported and the rest 28% or 115 BBTUD to cater to domestic needs.
However, the ministry through the technical team at the moment was still completing the evaluation and negotiation of the prices for each buyer.
"I don't remember the details about the prices. However, we certainly hope for the best prices, which will be negotiated," he said yesterday.
Darwin explained the 72% figure for export had already put into account the need of domestic gas buyers.
"Eleven percent will go to State Electricity Company PLN [Ltd] and seven percent will go to fertilizer plants. It means that we have showed concrete action to show the spirit of allocating gas to cater to domestic needs. It is no longer a discourse."
Economic factor On the other hand, he explained, participation from investors was also needed to develop domestic gas.
However, he added, investors surely would put into account the economies-of-scale of gas fields in deciding whether it would be feasible for them to make investments or not.
"For certain fields, such as Donggi-Senoro, they will be uneconomical and unattractive for investors to develop if the entire gas is only allocated to cater to domestic needs, according to the technical team of the Directorate General of Oil and Gas. Therefore, we need to mix it with export."
Besides, Darwin added, the decision on the allocation of gas from Donggi-Senoro had been in line with the result of the meeting with Vice President Boediono some times ago.
"So, I decide to agree with the technical recommendation, namely to allocate 30% of the production to cater to domestic needs and 70% to be exported. That's my decision based on the result of the meeting with the Vice President," told Darwin.
Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Evita Herawati Legowo disclosed the government indeed had finished discussing the allocation of gas from Donggi-Senoro.
"However, the sale prices still need further discussion. We will use some formula."
Previously, Head of the Upstream Oil and Gas Regulatory Agency R. Priyono sent his recommendation regarding to which gas from Donggi-Senoro should be allocated.
Based on the recommendation, the gas should go to PT PLN (60 BBTUD), PT Panca Amara Utama (PAU, 55 BBTUD), and PT Donggi Senoro LNG (DS LNG, 300 BBTUD).
The recommendation is to follow-up the letter of Minister of Energy Darwin Zahedy Saleh 4186/ 13/MEM.M/2010/2010 on Donggi-Senoro gas development project.
The letter reads that the government through the Minister of Energy and Mineral Resources decides to allocate, if possible, the entire gas from Donggi Senoro to cater to domestic needs or, based on the technical and economic aspects, allocate 25%-30% to cater to domestic needs. (wiw)
Minister of Energy and Mineral Resources Darwin Zahedy Saleh revealed he had approved to allocate 72% of gas from Donggi-Senoro field or 300 BBTUD to be exported and the rest 28% or 115 BBTUD to cater to domestic needs.
However, the ministry through the technical team at the moment was still completing the evaluation and negotiation of the prices for each buyer.
"I don't remember the details about the prices. However, we certainly hope for the best prices, which will be negotiated," he said yesterday.
Darwin explained the 72% figure for export had already put into account the need of domestic gas buyers.
"Eleven percent will go to State Electricity Company PLN [Ltd] and seven percent will go to fertilizer plants. It means that we have showed concrete action to show the spirit of allocating gas to cater to domestic needs. It is no longer a discourse."
Economic factor On the other hand, he explained, participation from investors was also needed to develop domestic gas.
However, he added, investors surely would put into account the economies-of-scale of gas fields in deciding whether it would be feasible for them to make investments or not.
"For certain fields, such as Donggi-Senoro, they will be uneconomical and unattractive for investors to develop if the entire gas is only allocated to cater to domestic needs, according to the technical team of the Directorate General of Oil and Gas. Therefore, we need to mix it with export."
Besides, Darwin added, the decision on the allocation of gas from Donggi-Senoro had been in line with the result of the meeting with Vice President Boediono some times ago.
"So, I decide to agree with the technical recommendation, namely to allocate 30% of the production to cater to domestic needs and 70% to be exported. That's my decision based on the result of the meeting with the Vice President," told Darwin.
Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Evita Herawati Legowo disclosed the government indeed had finished discussing the allocation of gas from Donggi-Senoro.
"However, the sale prices still need further discussion. We will use some formula."
Previously, Head of the Upstream Oil and Gas Regulatory Agency R. Priyono sent his recommendation regarding to which gas from Donggi-Senoro should be allocated.
Based on the recommendation, the gas should go to PT PLN (60 BBTUD), PT Panca Amara Utama (PAU, 55 BBTUD), and PT Donggi Senoro LNG (DS LNG, 300 BBTUD).
The recommendation is to follow-up the letter of Minister of Energy Darwin Zahedy Saleh 4186/ 13/MEM.M/2010/2010 on Donggi-Senoro gas development project.
The letter reads that the government through the Minister of Energy and Mineral Resources decides to allocate, if possible, the entire gas from Donggi Senoro to cater to domestic needs or, based on the technical and economic aspects, allocate 25%-30% to cater to domestic needs. (wiw)
