BP ready to revise gas supply concession<\/p>\n
Moch. N. Kurniawan, The Jakarta Post, Jakarta<\/p>\n
BP Indonesia, a unit of British-American oil and gas firm BP
\nPlc., said it expected to reach an initial understanding with the
\nstate-owned oil and gas firm Pertamina within the next few days
\non the revision of BP's concession for the supply of gas in East
\nJava.<\/p>\n
\"Yes ... we'll talk with Pertamina on this issue. We hope to
\ngain a good understanding of alternative solutions,\" BP Indonesia
\nvice president for government and public affairs Satya W. Yudha
\ntold The Jakarta Post on Thursday.<\/p>\n
He said that BP was willing to revise the contract.<\/p>\n
He was reluctant to provide further details.<\/p>\n
BP, through a subsidiary called BP Kangean, holds a concession
\nto supply some 600 million cubic feet per day (mmscfd) of gas to
\nEast Java until 2010 as agreed under a contract signed by
\nPertamina in 1980.<\/p>\n
Other oil and gas firms are only allowed to supply gas if the
\ndemand in the province exceeds 600 mmscfd.<\/p>\n
But as BP Kangean gas output continues to decline, the
\ngovernment thinks it is unfair to maintain a contract that
\nprohibits others from bringing in the necessary supplies.<\/p>\n
BP Kangean gas output stood at around 300 mmscfd in September
\nlast year, and at 250 mmscfd in February this year.<\/p>\n
It the contract is maintained, East Java would suffer a gas
\nshortage in 2004.<\/p>\n
To avoid such an eventuality, the government is considering
\ncanceling BP Kangean's concession.<\/p>\n
Several gas firms have expressed their readiness to supply gas
\nto East Java. They include Pertamina, Kodeco, Mobil Cepu and
\nMadura, and Lapindo Brantas.<\/p>\n
The state-owned electricity company PLN, one of the major gas
\ncustomers in East Java, said it has been suffering shortages
\nsince early this year, forcing the company to use diesel fuel as
\nan alternative.<\/p>\n
PLN's director for distribution and marketing Tunggono said
\nthe switch to diesel fuel had raised the company's cost of
\nproduction by 10 percent to 15 percent.<\/p>\n
\"But we have no choice. Otherwise our power plant would be
\nunable to operate,\" he said.<\/p>\n
PLN operates a gas-fired power plant in Gresik, East Java,
\nwhich according to a PLN official, consumes about 200 million
\nstandard cubic feet per day (mmscfd) of gas.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bp-ready-to-revise-gas-supply-concession-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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