VIVAnews - The country could potentially suffer from US$ 5.389 billion worth of losses if the downstream project Donggi Senoto Liquid Natural Gas (DSLNG) is maintained.
Head of Data and Information Center of the Indonesia Corruption Watch (ICW) Firdaus Ilyas said the total amount of losses consist of downstream gas development scheme from US$400-US$800 million of factory development and US$4,589 billion worth of gas sales from the upstream to the downstream.
“US$4,589 billion, assuming that the selling price of Japan Crude Cocktail (JCC) gas is 70 per barrel with the selling price of US$6,16 per mmbtu (million British thermal unit). Meanwhile, the normal price is US$8,40 per mmbtu. So, there is a US$2,24 per mmbtu worth of disparity,” IIyas said at the ICW office on Jalan Kalibata Timur IV D Jakarta on Tuesday, August 18.
Therefore, he said, the selling price of PT DSLNG’s gas was much lower than the selling price in Bank Indonesia’s exports scale.
According to him, ICW recommends the selling price to be increased between US$2 to US$2.24 per mmbtu. In addition, the factory’s investment fee should also be escalated from US$2 billion to US$1.6 billion. “If there is any upstream scheme, it wouldn’t be a problem because the cost recovery will be considered as an investment,“ Ilyas said.
However, he said, if the government wishes to retain the downstream scheme Gas Sales Agreement (GSA), the factory development investment must be revised.
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Translated by: Nataya Ermanti
