PGN Wants Cheaper LNG for Industries

TEMPO.CO, Jakarta - Jobi Triananda Hasjim, commercial director of PT Perusahaan Gas Negara (Persero) Tbk--the state-owned gas company also known as PGN, is hoping that the government would put a cheaper price foe liquefied natural gas (LNG) used for domestic industries. Jobi argued that if LNG prices at the upstream side are too high, it would be difficult for the industry to absorb the volume.

He said that the government must help maintain LNG prices for the domestic industries, as "domestic industries have limited purchasing power," he said during PGN's birthday celebration at the National Monument, Jakarta, Sunday, May 19.

Jobi said that PGN had had several meetings with BP Tangguh, which sells LNG from the Tangguh LGN refinery in Bintuni Bay, West Papua. However, there have been no price agreements thus far.

Today, Jobi said, the average selling price (ASP) of LNG sold by PGN ranges at US$10 per mille-mille British thermal units (MMBTU). Meanwhile, head of the Special task Force Unit for Upstream Oil and Gas (SKK Migas), Rudi Rubiandini said that the ASP of LNG in the domestic market stood at $11 per MMBTU.

Jobi said that said prices may still be acceptable by the state-owned power company, PT PLN Limited. He argued that with oil prices ranging at $20 per MMBTU, the use of LNG is still more efficient than fuel oil. However, PLN has different method of cost calculation with other industries.

"In Papua alone, LNG is sold at $11, added to the costs of freight, regasification and distribution, the price reaches more than $15 per MMBTU, or 50 percent more expensive (compared to the pipeline gas price sold by PGN). Therefore, there should be a special calculation of the industry sector," he asserted.

BERNADETTE CHRISTINA