SKK Migas, Badak LNG And East Kalimantan PSC Contractor Sign Bontang Processing Agreement

JAKARTA - SKK Migas, Badak LNG, and East Kalimantan gas-producing Cooperation Contract Contractors (KKKS) signed a Bontang Processing Agreement (BPA).

With this signing, the processing of natural gas from various gas producers into liquefied natural gas (LNG) and liquefied petroleum gas (LPG) has better legal certainty.

In his remarks, the Head of SKK Migas, Dwi Soetjipto, expressed his appreciation to all parties, especially Pertamina, which has provided support to Badak LNG for the signing of this agreement.

“The cooperation and good intentions that have been shown so far. With this good cooperation, finally, there is an official underlying document regarding gas processing activities at the Badak LNG Plant as a follow-up to the Minister of Finance's decision," said Dwi Soetjipto in a statement to the media, Tuesday 14 February.

Dwi added, with the signing of this agreement, not only can it become a legal umbrella for the parties, but can also provide investment certainty, especially in operational implementation and as an implementation of the principles of good upstream oil and gas governance.

According to Dwi, the Badak LNG Refinery plays a very crucial role in efforts to achieve national gas lifting, where in 2022 around 41 percent of the national LNG production volume or 81 cargoes are processed at the Badak LNG Refinery. And from the sale of LNG, it was able to generate state revenue of 2.76 billion US dollars or around IDR 41 trillion.

On this occasion, Dwi also asked PT Badak LNG to make efforts to make efficient use of gas (own use) for LNG plant operations so that state revenues can be optimized.

Meanwhile, Main Director, Pertamina Nicke Widyawati expressed her gratitude to SKK Migas for always pushing for an increase in upstream oil and gas production, so that energy independence can be increased together.

According to Nicke, going forward, the role of gas is very important in the energy transition.

"We need a reliable energy transition, namely gas and we have gas potential that we can still increase," said Nicke.

Currently, continued Nicke, the need for gas continues to increase, both from industry, households, and transportation. And the government's efforts towards net zero emission must also continue to be supported.

On the same occasion, President Director & CEO of Badak LNG Gema Iriandus Pahalawan also expressed his gratitude to the parties who continue to entrust the management of the Bontang LNG Refinery to PT Badak NGL.

"Thank you, we will make the best use of this mandate and work together to achieve energy independence," concluded Gema.