BPH Oil and Gas Pushes Gas Distribution Project Auction

By : Aldo Bella Putra | Monday, July 31 2017 - 10:27 IWST

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INDUSTRY.co.id - Surabaya- The Downstream Oil and Gas Regulatory Agency (BPH Migas) is pushing for auction of projects in gas distribution and transmission, aiming for efficiency and lowering gas prices to be cheaper.

Head of BPH Migas, Fanshurullah Asa in Surabaya, said last week that the gas distribution process done in some areas is done by direct appointment, so the toll fee or uncontrolled gas transportation cost.

"If the direct appointment will be a business-to-business relationship, or the agreement only occurs between business entities to other business entities, so it is not controlled how many toll fees," said Fanshurullah, after opening the Workshop on Determination of Existing Areas and Development for Distribution Area and certain Commercial Area in Surabaya.

Therefore, he said, with the auction of the project, in the future the winning bidder will be given territorial rights for approximately 30 years, so there will be no overlapping existence of distribution pipes in a region, and of course there will be efficiency of gas prices.

"The goal is to make the efficiency of gas prices, especially at the industrial level, so that it can boost economic growth, because for 15 years BPH Migas has never established an auction process on gas distribution lines, and auction only occurs in the transmission line process," he said to the crew media.

Fanshurullah said the basic rules of the auction already exist and do not need to wait for the law because it is too long, because it can refer to the Regulation of BPH Migas No. 15 of 2016, which regulates the auction of transmission chamber and gas distribution network area in the framework of granting special rights.

"Therefore, at this workshop we want to socialize the regulation, and no study is needed, because in the regulation the registered business entity can propose which region will be developed to grow the economy through auction process," he said.

Fanshurullah confessed, there is now a business entity that proposed to participate in the auction process, namely the Regional Government of South Sumatra and enterprises in the area Manyar, Gresik, East Java.

"For Local Government of South Sumatera Regional Government proposed to us to join the auction of transmission line in Pusri to Tanjung Api-Api Area and crossing to Bangka island to PLN power plant," he said.

He hopes that with the encouragement of every business entity following the auction process of gas distribution projects, in the future there will be efficiency, and gas prices can be reduced cheaply, such as the wishes of the government.

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