Maximize Domestic Absorption, SKK Migas Will Turn Natural Gas Into LPG

Illustration - Bronang Pavilion (Bronang Platform) in the Natuna Sea, Riau Islands. (DOC. BETWEEN/HO-SKK Migas/aa.)

JAKARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) revealed that it is currently seeking a number of strategic steps to boost natural gas absorption for domestic purposes.

Deputy for Finance and Commercialization of SKK Migas Kurnia Chairi said there is potential for domestic natural gas that could be used to produce Liquified Petroleum Gas (LPG).

"Imports of LPG 2023 may amount to 6.8 million metric tons (MT). So from 9 million MT (needs), 6.8 million MT is imported. Meanwhile, there is potential for gas in the domestic area that can be used for LPG production," said Kurnia, quoted on Tuesday, June 18.

Kurnia added, SKK Migas together with the Ministry of Energy and Mineral Resources have identified around 1.5 million MT natural gas potential to be produced into LPG.

However, according to him, there is a further process for this.

"At least, we have mapped 1.5 million MT per year which has the potential. This will reduce LPG imports as well as enlarge domestic gas sources," he continued.

Previously, Deputy for Exploitation of SKK Migas Wahju Wibowo reminded upstream oil and gas industry players not only to sell natural gas in raw form. He reminded that upstream oil and gas contractors are required to sell more valuable derivative gas products, such as LPG.

He also did not deny that there would be a longer process to be carried out, as well as more investment. But by processing natural gas as LPG, there is a much higher potential value or result.

"When it can be done the zero routine flaring, and also optimistic about the use of gas fuel, whether then the C3 and C4 contents can be taken as LPG, because they can be sold more expensively," said Wahju.

Wahju explained that so far the price of gas has been sold for 8 US dollars per MMBTU. This figure could increase to 27 US dollars per MMBTU if the gas is converted to LPG.

Therefore, the challenge of the upstream oil and gas industry is to create gas potential in order to provide greater added value. Wahju challenges all contractors to convert natural gas into derivative products in the form of LPG.