SKK Migas ensures no gas price hike with a surplus in Java

Jakarta – The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) ensures no policy to increase gas prices upstream. Likewise, the adequate gas supply for domestic use is ensured to be safe.

Head of Programme and Communication Division of SKK Migas, Hudi D Suryodipuro, said some areas, such as East Java and Central Java, have an excess gas supply. This is because the level of gas production in the two regions is still below the production rate.

“Until now, there is certainly no government policy to increase gas prices upstream,” said Suryodipuro in an official statement.

SKK Migas also ensures that national gas production is sufficient to fulfil the domestic gas supply, including pipeline gas supply in Sumatra in the form of LNG. According to Hudi, national gas production exceeds domestic gas consumption, which currently absorbs around 67 per cent of existing gas production.

SKK Migas assured that the upstream oil and gas industry fully supports efforts to increase domestic gas absorption. In fact, shortly, six gas projects will be onstream in the second half of 2023 with a total capacity of around 394 million cubic feet per day (MMSCFD). The projects come from Baronang Gas field development optimisation (OPL), Premier Oil’s GBFCP, Seng Compressor, Segat Compressor, Medco Grissik’s LTRO 18 and HCML’s MAC.

The national gas supply is expected to increase further with the start of production of the Tangguh Train 3 gas project, a National Strategic Project (PSN). The gas allocation from Tangguh Train 3 is prioritised for domestic use, ensuring that domestic gas demand can be entirely met.

Regarding the difference in gas prices in the field, according to Hudi, each field has different economic characteristics. Therefore, any movement of gas in one field will not affect other gas fields.

He also explained that SKK Migas supports the Government in reducing gas prices upstream through tiered evaluations and fiscal policies, as well as implementing specific gas price provisions as stipulated by the Government in the Specific Natural Gas Price (HGBT) policy.

The various efforts that SKK Migas have made require synergy with all relevant parties to ensure that end users can receive gas at a fair price, including the participation of downstream parties who distribute the gas to end users. (Hartatik)

Banner photo: Arun LNG Terminal (Source: PGN)

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