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Help PLN by Cutting Singapore Gas Sales, Govt Urged
Ririn Radiawati Kusuma | July 15, 2011

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Indonesian lawmakers have urged the government to renegotiate its gas sales contract with Singapore because the archipelago wants to secure more gas to supply to state utility company Perusahaan Listrik Negara.

“We [lawmakers] hope the government will consider renegotiating the gas sales contract with Singapore,” Totok Daryanto, a member of House of Representatives Commission VII, which oversees energy, said on Thursday night. “The government should prioritize domestic use rather than export it to Singapore.”

The gas sold to Singapore comes from a gas plant operated by ConocoPhillips. The US oil producer operates the Grissik oil and gas block in South Sumatra and B Block in Jambi.

ConocoPhillips produces about 1,000 million cubic feet per day (mmscfd) of gas. Of that output, 300 mmscfd is sold to Singapore, 340 mmscfd is sold to gas distributor Perusahaan Gas Negara and the remainder goes to Chevron Pacific Indonesia.

CPI is the biggest oil producer in Indonesia, with total output of 370,000 barrels per day, about 40 percent of Indonesia’s total oil production.

PLN said it was suffering from a gas deficit of as much as 100 mmscfd to fuel its Muara Tawar power plant in North Jakarta.

“We need a certain decision to secure the gas supply for our Muara Tawar power plant. We really hope the government can divert the gas for our use,” Murtaqi Syamsuddin, a PLN official, said, referring to the gas earmarked Singapore.

PLN offered to purchase the gas at $17 per million British thermal units (mmbtu). According to industry sources, Singapore buys gas from Conoco’s Grissik plant at about $12 per mmbtu.

Energy Ministry official Evita Legowo said the government was working on gas sale renegotiations, but faced “several difficulties.” She declined to elaborate.

A PLN representative last month said the company was seeking to import gas from overseas — potentially from Iran, Kuwait, Australia or Papua New Guinea — to fuel its plants.

PLN needs about 1,800 mmscfd in fuel to supply its gas-fired plants, which have a total capacity of 9,800 megawatts. The government provides 800 mmscfd of gas and the company needs to make up the shortfall.