Tito Summa Siahaan
Riau Investment Development and four other Indonesian companies have signed a gas purchase agreement with the country’s energy operators including Pertamina and Medco Energi Internasional.
The agreement will lift gas consumption in the domestic market by 75 trillion British thermal units, according to Raden Priyono, the chairman of oil and gas regulator BPMigas.
“The contracts will potentially increase the state revenue by $192 million,” said Raden, who witnessed the signing of the gas purchase contracts in Bali on Tuesday .
Other companies affected include Perusahaan Daerah Nusa Serambi Persada, which secured up to five billion British thermal units per day (BBTuD) from the Simmengaris block in East Kalimantan, which is partly controlled by Pertamina and Medco Energi.
Raden said BPMigas would provide privilege rights for regions to secure natural gas in order to fulfill their electricity and industry needs based on economic consideration and the regions’ capability. Raden claimed that BPMigas was committed to increasing natural gas supply for domestic consumption.
“Last year, some 3,177 BBTuD was allocated for domestic consumption, or 44 percent of the total production. Compared to five years ago, the domestic allocation has increased by about 200 percent,” he said.
Raden called for the need to improve the country’s infrastructure as the upstream industry lacks the flexibility in terms of distributing natural gas. “Infrastructure developments must be accelerated, especially considering that more gas projects will go upstream in the future,” he said.