FSRU West Java (Photo by : Nusantara Regas)

JAKARTA (TheInsiderStories) – The Special Task Force for Upstream Oil and Gas Business (SKKMigas) has appointed gas distributor PT Perusahaan Gas Negara Tbk (IDX:PGAS) over other state-owned energy firm PT Pertamina. The agency said in a stipulation dated Dec. 4, 2017 to sell the Liquefied natural gas (LNG) is produced by the PT Badak LNG plant in East Kalimantan.

Gas is originally taken from the Sanga-Sanga Block, which is partly owned by PT Saka Energi, a subsidiary of PGAS. The allocation and the price of the LNG are to be determined by the Energy and Mineral Resources Ministry (MEMR)

Acting Director General for Oil and Gas of MEMR Ego Syahrial has expressed his support for the decision of the SKKMigas as the seller of the portion of  owned by the government for 2018.

“We open opportunities (for anyone to bid). This means that the government will award the one who can give the best return to the State,’ Syahrial said on Sunday (12/12).

Based on the letter, the seller can now start searching out potential buyers for the LNG, SKK Migas said.

Indonesia is one of the major LNG exporters in the world. A large portion is sold to major committed buyers from overseas, including those from Japan and other East Asian countries, under long-term contracts. However, the portion of the LNG owned by the government is sold on the spot market.

When asked by reporters about the switching of sellers, Syahrial said he is confident that Pertamina would ultimately come around to agree with the appointment, assuming the Holding for Oil and Gas can be realized next year.

In the past, uncommitted buyers of LNG were sold by an entity called ‘Joint Management Group’ (JMG), which is 55-percent owned by Pertamina. The remaining shares were owned by VICO Indonesia (20 percent), Japan Indonesia LNG Co. 15 percent and Total E&P Indonesia (10 per cent).

Syahrial said the seller to uncommitted buyers should not be influenced by certain favored parties. ‘That is the old way. Today, we want to be as transparent as possible. All the healthy business will provide a significant contribution to the State,’ he said.

Written by Roffie Kurniawan, Email: roffie@theinsiderstories.com