PRESIDENT ASKED TO DECIDE ON SENORO GAS PROJECT

By Andi Abdussalam

Jakarta, May 12 (ANTARA) - Legislators have urged President Susilo Bambang Yudhoyono to take over the problem of the Donggi-Senoro gas field project in Central Sulawesi so that it could be decided whether its gas proceeds are to be exported or to be fully designed for domestic consumption.          With an investment of about US$3.7 million and a construction period of about 3.5 years, the Donggi-Senoro project, approved by the Upstream Oil and Gas Regulating Agency (BP Migas) in February 2007, has been delayed several times following the government's decision in June 2009 to stop exporting gas in order to meet its domestic demands.          The government decision to stop its gas export has caused delay in the continuation of the project because the consortium, PT Donggi-Senoro LNG (PT DSLNG), has concluded a head of agreement (MoA) with buyers such as Chubu Electric Power Company  and Kansai Electric Power Company.          The legislators made the call after Vice President Boediono decided on Monday to delay taking a decision on the continuation of the project. Lawmaker Sutan Bhatoegana of the Democrat Party Faction of the House of Representatives (DPR) said on Tuesday that the president had to take over the problem.          "Vice President Boediono should take the Senoro gas field issue to a cabinet meeting so that the cabinet could decide the continuation of the project," Bhatoegana, who is also a member of the House Commission VII on energy affairs, said.           After all, the vice president has no authority to decide on the Senoro gas field project. Boediono is therefore considering whether the decision on the continuation of the Senoro project should be decided by a cabinet meeting or only by the minister of energy and mineral resources.          "If the problem needs to involve relevant ministries, the decision should then be made in a cabinet meeting. But if the problem is simple it could be decided by the energy and mineral resources minister only," Yopie Hidayat, vice presidential spokesman said.           Other member of the House Commission VII M Romahumuziy of the United Development Party (PPP) faction shared Bhatoegana's opinion. Romahumuziy said that in the country's legislation system, a vice presidential decision was not known.          "Therefore, President Yudhoyono needs to take over the problem soon and decides it in a cabinet meeting," Romahuniziy said.          He warned that uncertain fate of Donggi-Senoro project could trigger a turning point of investment climate in the national oil and gas sector to a negative direction.          Romahurmuziy said the government would probably lose its golden opportunity to improve investment in gas sector after the aspirant buyers from Japan and South Korea intended to withdraw themselves from the  Donggi- Senoro gas project.          Director of ReforMiner Institute Pri Agung said meanwhile that If Vice President Boediono was not able to take a decision on the Donggi-Senoro gas block, President Yudhoyono should lead a cabinet meeting to decide it.          "The project should not be let protract because all sides are waiting for it," Agung said.          Chairman of the Presidential Working Unit for Supervision and Development Control Mangkusubroto said that the government had delayed taking a decision on the project.          "I assure that the decision will not be made this week. We will set another schedule," Mangkusubroto said after an internal meeting with Vice President Boediono on Monday (May 10, 2010).          He said that Donggi-Senoro should be seen in the wider context, namely the national gas policy where the policy must take side with the domestic interest.          Member of Regional Representative Council (DPD) for Central Sulawesi Nurmawati Dewi Bantilan said the people of Central Sulawesi were waiting for the project. "The Senoro project will improve the welfare of the people and create jobs," she said.          She said that with an estimated state income from the project of US$430 million or Rp3.9 trillion, Central Sulawesi province will get allocation of Rp1.2 trillion.          However, the decision on the continuation of the project still has to wait for sometime.          Vice President Boediono is until now conducting a thorough study. According to Yopie Hidayat, the vice president is still collecting various inputs. "The study is being focused not on the Donggi-Senoro only but also the on latest data about the balance of domestic gas consumption," Yopie said.          The project is owned by PT Donggi Senoro LNH (DSLNG) which is a consortium of Mitsubishi Co, publicly listed PT Pertamina and PT Medco Energi International, with a share ownership composition of 51 percent for Medco, 29 percent for Pertamina and 20 percent for Mitsubishi.          On June 1, 2009, Pertamina delivered four scenarios for the development of the Senoro project to a cabinet meeting led by then Vice President Jusuf Kalla.          It set four scenarios for the development of the project, including the gas prices. For export, the price was set at US$6.16 per MMBTU (million metric British Thermal Unit) and for domestic consumption at US$3.17 per MMBTU.          In the meantime, about 335 MMSCFD (million metric standard cubic feet per day) would be exported and 70 MMSCFD would be for domestic consumption.          However,Vice President Jusuf Kalla wanted that a final decision would be taken after data on the balance of domestic gas consumption had been taken into account.          After all, the government asked the consortium (PT DS LNG) to meet six conditions before the project was to go on.  The six conditions included a revision of the planned development, approval from the shareholders and secured domestic gas supplies.          But in a cabinet meeting on June 3, 2010, the vice president announced that the government had decided to ask the consortium to supply all its proceeds to domestic demands. According to Kalla, President Yudhoyono had agreed to stop gas export to meet domestic demand.          Director General for Oil and Gas Evita Legowo said Indonesia's balance of domestic gas consumption would still face shortages in the period between 2011 and 2015.          In this case, Pertamina sent a letter to the president on July 14, 2009 asking that not all of the Senoro gas proceeds should be designed for domestic consumption but some should also be exported.          Pertamina's reason was that the domestic gas supply deficit could be met with the production of other gas fields such as the Mahakam, Makassar Strait, Cepu and Natuna.      (T.A014/A/H-NG/A/O001) 12-05-2010 11:46:4