Govt Indicates To Export Some Of Tangguh LNG Production

Jakarta, Dec 3 (ANTARA) - The government has indicated it will export some of the LNG production of Tangguh, West Papua, which is usually supplied to US firm Sempra, according to a letter of the energy and mineral resources ministry. Energy and Mineral Resources Minister Jero Wacik has sent a letter, the copy of which was made available to ANTARA here on Sunday, to the head of the Temporary Working Unit of the Upstream Oil and Gas Executing Agency (SKSP Migas). The letter is dated November 23, 2012 and was sent to the head of the SKSP Migas which is chaired by the minister himself. Based on the letter, of the Tangguh gas field production in 2013, only 10 cargoes will be supplied to domestic buyers, comprising 8 cargoes for fertilizer industries and 2 cargoes for state-owned electricity PLN. In 2014, only 20 cargoes of the production would be supplied to domestic need of which 8 cargoes for fertilizers and 12 cargoes for PLN. In 2015, a total of 20 cargoes will be supplied to domestic need, consisting of 12 cargoes to PLN and 8 cargoes to new project. In the meantime, 21 cargoes will be supplied to domestic need in the 2016-2018 period, of which 12 cargoes will go to PLN and 9 cargoes to new projects, and in 2019, 16 cargoes will be supplied to new projects in. Based on the letter, production beyond the allocation for domestic needs will be exported to buyers who offer the highest price. In total, the volume of Sempra gas production reaches 42 cargoes per annum. Legislator Bobby Rizaldi of the Golkar Party in the House of Representatives (DPR)`s Commission VII on energy affairs, said that all Tangguh production of 42 cargoes should be allocated for domestic needs. With only about 10-21 cargoes designed for domestic needs while the remaining ones for buyers with the highest price offer, the government indicated it would export some of the Tangguh LNG production. The government earlier planned to export the Tangguh gas production on a long-term basis to Japan`s Kansai Electric, Kyushu Electrict and Tepco beginning 2013 until 2035 in various volumes with with 16 cargoes being the smallest for each per annum. Robby questioned the government`s plan to export the gas because the country`s LNG terminals such as those in Arun, Central Java, Lampung province and Jakarta needed LNG supplies. PLN chief for fuel and gas affairs Suryadi Mardjoeki said his company actually hoped to get 3 to 4 cargoes of gas from Tangguh in 2013. He said that the government had agreed the price with a formula of 11 percent multiplied with Japan crude cocktail (JCC) rate plus one US dollar per MMBTU (million metric british termal unit). "The government has agreed to the price formula," he said. The price formula accorded the agreement between BP Berau (the operator of Tangguh gas field) and PLN. Based on plans, the price will undergo a gradual price escalation between 12 and 14.5 percent based on the JCC rate begining in 2014 untul 2032.