Pertamina EP Cepu (PEPC), a subsidiary of state-owned gas and oil company Pertamina, has struck a deal with state electricity firm PLN regarding the gas price generated from the former’s future gas field Jambaran Tiung-Biru (JTB) in Cepu, Central Java, after months of deadlock over the subject.
The deal was reached after Pertamina agreed to lower the future JTB gas price to a flat rate of US$7.6 mmbtu for a 30-year-long gas supply from the previous figure of around $9 mmbtu.
Representing their respective companies, Pertamina gas director Yenny Andayani and PLN procurement director Supangkat Iwan Santoso signed a preliminary agreement over the gas price, witnessed by Energy and Mineral Resources deputy minister Arcandra Tahar in jakarta on Tuesday.
”Jambaran Tiung-Biru is one of the government’s strategic projects,” said Arcandra.
"The initial proposal in 2015 estimated the project would cost $2.05 billion, but it was finally lowered to $1.8 billion so the gas price would be affordable for PLN.”
The economic consideration also led PEPC to acquire 45 percent of the project's shares, which were previously owned by ExxonMobil, who partnered with PEPC on the project.
The future gas field is planned to power electricity plants in Gresik, East Java, with an estimated production capacity of 170 mmscfd over the next 16 years and 330 mmscfd in total.
Jakarta Post, Page-18, Wednesday, August 9, 2017
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