Erwin Gitarisyana. Natural Gas Pricing in Indonesia Using Netback Market Value Method. Master's Degree(Energy Management Technology). King Mongkut's University of Technology Thonburi. KMUTT Library. : King Mongkut's University of Technology Thonburi, 2011.
Natural Gas Pricing in Indonesia Using Netback Market Value Method
Abstract:
About 50% of natural gas in Indonesia is exported to other countries despite the relatively
high demand of natural gas, which may cause supply shortage in future. One of the
reasons is that the export price of natural gas is higher than the domestic price. Indonesia
has been an energy exporter for a long time, and has subsidized the cost of its domestic
energy supply. Natural gas is one of the fuels supported by the government. Many of the
crude oil importing countries set the domestic natural gas price with references to the
prices of crude oil mix, of which Japanese crude cocktail (JCC) method is commonly used
to determine the natural gas price in the country. However, JCC is heavily dependent on
crude oil prices and excludes the other substitution fuels. In this study, the natural gas price
for domestic consumption in Indonesia is determined by using netback market value. The
method takes into account prices of all natural gas competing fuels with proper weightings
of their shares in each consumer sector, by which the natural gas price does not depend
only on crude oil prices, but also on other substitution fuel prices. Netback market value
method provides the relative prices of the natural gas for the consumers to other fuels.
Information of all types of fuel including prices and consumption amounts in the past is
used to calculate natural gas price in comparison with the actual price. The result will be
useful for the policy makers to set the price of natural gas and the country's energy plan in
order to secure continuous supply of natural gas.
King Mongkut's University of Technology Thonburi. KMUTT Library