Completed Price Issues, Government will Determine Masela Gas Block Buyers Wednesday, January 10, 2018

  • 2018.01.12 Friday
  • 14:29

 

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) will soon determine potential buyers from the gas production of Masela Block. This step is done in order to resolve the issue of gas prices that can not be in accordance with the ability of domestic industry.

The ESDM Ministry has requested a list of candidates to the Ministry of Industry requiring gas pipelines from oil and gas fields developed under the onshore scheme.

 

"We are asking the Ministry of Industry a  list about  necessity (the company) whether it is fertilizer or cement outside the power plant," he said.

 

Similarly, Head of Special Unit for Upstream Oil and Gas Activities (SKK Migas), Amien Sunaryadi, explained that prospective buyers have not been set up yet although some time ago there was a price quote from prospective buyers, the domestic petrochemical industry that still asked for the price below USD 6 per MMBTU.

 

"The allocation of gas through the pipeline, who wants to buy has not been determined yet, some time ago, some have interest, (but) the price is USD 3 (per MMBTU)," said Amien.

 

Amien said, the proposed price of USD 3 per MMBTU is still not in accordance with the price economy upstream oil and gas. "So if the domestic industry offers USD 3 (per MMBTU), yes we (the upstream oil and gas industry) find themselves alone, in Bintuni Bay (West Papua) itself  for USD 5 (per MMBTU)", said Amien.

 

Masela's block itself has a refinery production capacity of up to 150 mmcfd of piped gas and 9.5 million tonnes per year (MTPA) of liquefied natural gas (LNG). The Masela block is projected to into production in 2027 or retreat from the previous estimate of 2024.

 

Pre-FEED preparation process is currently being undertaken: analyzing the best options related to type and production capacity, investment and economic cost, and project schedule (revised POD I). "It is expected that the mid-year pre-FEED is completed, so the end of the year revision of POD I can be completed," said Amien. (NA)

 

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