JAKARTA - Deputy for Finance and Monetization of SKK Migas, Arief Setiawan Handoko, said that the realization of gas supply for domestic use in the last 5 years has always been above 58 percent.
This is a commitment of the upstream oil and gas industry to always prioritize the allocation of natural gas to meet domestic needs.
"Actually, the DMO obligation according to the regulations is 25 percent of the portion of natural gas production that is part of the PSC Contractor. Meanwhile, the realization of gas supply for domestic always exceeds this figure," Arief said in a written statement to the media, Friday, January 7, 2022.
SKK Migas noted that from the volume of gas supplied for domestic use, the largest absorption was the industrial sector with a share of 28 percent and the electricity sector with a share of 20 percent.
Not only that, natural gas is also used for other purposes, for example for lifting oil or to support government programs such as the city gas network (Jargas) and gas fuel (BBG).
Arief said the supply for the electricity sector was quite large. Based on the data, it shows that the electricity sector has always been the main priority for gas supply from the upstream oil and gas sector.
"Every time there is a new reserve, we always prioritize PLN to supply it before we decide to market gas to other buyers," said Arief.
Arief added, as a buyer of natural gas, PLN also gets privileges compared to other buyers, namely getting the flexibility to utilize gas from one source in upstream oil and gas in several PLN generating areas.
This flexibility is known as a multi-destination scheme. The implementation of this scheme has been applied to several contracts, both of which are directly purchased by PLN or other commercial business entities.
An example of the implementation of a multi-destination scheme with a direct buyer from PLN is the gas supply contract from PHE Jambi Merang, Kangean Energy Indonesia Ltd., ConocoPhillips Grissik Ltd., and Energi Mega Persada. Meanwhile, the implementation of the multi-destination scheme for PLN, which purchases gas through other commercial entities, is contained in the contract between PHE Jambi Merang and PGN; ConocoPhillips Grissik Ltd with PGN; and PEP Cepu with Pertamina.
In addition to providing gas supply according to the contract, the ESDM Ministerial Regulation Number 10 of 2020 states that PLN has accepted a gas price determination of US$6 per MMBTU.
If the actual price is above this figure, the portion of state revenue will be reduced to ensure that PLN continues to receive a gas price of US$6 per MMBTU and PSC Contractors can continue to run upstream oil and gas projects at a reasonable economic level.
"Considering that natural gas development takes a long time, we really hope that the planning for gas supply needs for power plants can continue to be addressed and perfected so that supply is safe and the development of oil and gas fields also goes well," he concluded.
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