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Indonesia Bags US$2.3 billion from 6 Oil, Gas Contracts

14 March 2014 09:14 WIB

TEMPO.CO, Jakarta - Six oil and gas contact of work (COW) contractors have signed gas sales and purchase agreements (SPA). Johanes Widjonarko, chief of the Special Taskforce for Upstream Oil and Gas Business Activity (SKK Migas), said the six COWs add US$2.3 billion. The total supply of gas from these contractors reached 915.22 trillion British thermal units (TBTU).

"The gas will be allocated for domestic needs," he said yesterday.

Widjonarko said that gas supply from three contractors will be used to assist oil lifting in Sumatra, meet the demand from fertilizer plants in East Java, and to supply power plants inEast Kalimantan. Three other contractors will supply for the petrochemical industry inSulawesias well as a number of industries and power plants in Batam.

The signing of this contract is expected to bring multiple benefits forIndonesia's economic growth. The industry sector will have sufficient supply of energy from the domestic production of gas. In addition, the additional gas supply will reduce the use of fossil fuels as an energy source used by the state power company, by PT PLN.

"It will lead to a lower volume of fuel subsidy," said Widjonarko.

SKK Migas's data shows that the allocation of domestic natural gas continues to increase by an average of nine percent per year since 2003. In 2013, the allocation of domestic gas reached 3,774 million British thermal units (MBTU) per day, or 52.1 percent of the total gas distribution. The volume is higher from 2012's allocation of 3,550 (BBTUD) or 52.7 percent of the total gas distribution.

For 2014, the domestic gas allocation is targeted to increase to 3,782 BBTUD, or accounting for 52.7 percent of the year's entire contractual commitments.

 

AYU PRIMA SANDI | AGITA SUKMA LISTYANTI (SURABAYA) | FERY FIRMANSYAH



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