Gas prices will be high until 2025, this is the culprit..

Gas prices will be high until 2025, this is the culprit..

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) predicts that world natural gas prices will still be high until 2025. This is because, from that period, Liquefied Natural Gas (LNG) projects were still minimal. 2015 – 2018 which has just made a Final Investment Decision (FID).

Deputy for Operations of SKK Migas, Julius Wiratno, said that the war between Russia and Ukraine had an impact on high world crude oil prices, this was due to the difficulty of meeting the demand for crude oil to a number of importing countries.

“This disrupts supply, this condition has caused world oil prices to have penetrated US$ 125 per barrel which is the highest price since the last 10 years. This happened because of the war situation and the lockdown (Covid-19),” said Julius, Thursday (14/4). /2022).

Not only rising world crude oil prices, the Russian war and also makes global gas prices rise. For example, the contract price of LPG Aramco (Aramco Contract Price/CPA) is currently at US$ 839 per metric ton from the initial assumption of only US$ 569 per metric ton.

“Until 2025, gas prices are predicted to be quite high due to the lack of LNG projects with FID for the 2015-2018 period due to project delays due to the Covid-19 pandemic. After 2025, gas supply is expected to start increasing from FID projects in 2019,” explained Julius.

For Indonesia itself, it has four giant gas projects. Among them are Indonesia Deepwater Development (IDD), Jambaran Tiung Biru, Badi Gas Field Masela Block and Tangguh Tran 3. The total investment for these four projects is recorded at US$ 37.21 billion.

According to SKK Migas records, the current IDD projects, namely Gendalo and Gehem, are planned to be on stream in the sixth quarter of 2025. The project, which has production reaching 844 MMSCFD and 27,000 BOPD, has an investment value of US$ 6.98 billion.
In addition, there is the Masela Block Project. This project is planned to be on stream in the second quarter of 2027. The project, with an investment value of US$ 19.8 billion, continues to be plagued by problems. Most recently, one of the operators, Shell, plans to leave the Masela Block.
Then is the Tangguh train 3 project. This giant LNG project is planned to be completed in December 2022. “This project has a production capacity of 700 mmscfd and 3,999 BCPD with an investment value of US$ 8.9 billion, and is expected to be on stream by the end of 2022,” he said.

The last one is the Jambaran Tiung Biru project which has gas production reaching 190 MMSCFD. This project is also targeted to be on stream in the second quarter of 2022.

“We must take the momentum by accelerating the work program in 2022, especially investment in upstream oil and gas in general,” said Julius.