Poised to ban gas exports, government reviews sale and purchase contracts

Jakarta – The government is reviewing various gas sales and purchase contracts abroad in preparation for stopping gas exports. The gas is prepared to fulfil domestic needs.

Coordinating Minister for Maritime Affairs and Investment Luhur Binsar Pandjaitan said that the use of gas in the country is projected to continue to increase in line with the energy transition period.

“The government will no longer permit business actors to extend gas sales contracts abroad. If the contract has been completed, we will not extend it,” said Pandjaitan.

Implementing the gas export ban policy is still awaiting a meeting with the president. Even so, he continued, the government will not be rash and will scrutinise every existing contract so that it does not violate the law, which could later have an impact on the investment climate in the country. “The government only stops gas exports whose contracts have expired,” Pandjaitan said.

So far, there are two large-capacity LNG facilities in the country, namely Badak LNG, which manages the Bontang plant in Kalimantan, now managed by Pertamina. Then there is the Tangguh LNG plant managed by BP in Papua.

Meanwhile, Chairman of the Investment Committee of the Association of Oil and Gas Companies (Aspermigas) Moshe Rizal said that the gas market in the country is not yet established compared to other countries, such as the United States. The transfer of gas sales entirely to the country, said Moshe, makes the calculations of cooperation contractors (KKKS) less attractive.

Rizal said, gas prices in Indonesia are largely driven by field economics, which are based on the high cost of gas production. This situation makes domestic gas prices irrelevant to price movements in the world market. (Hartatik)

Like this article? share it

More Post

Receive the latest news

Subscribe To Our Weekly Newsletter

Get notified about new articles