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Govt issues regulation on flare gas

The Energy and Mineral Resources Ministry has issued a ministerial decree regulating the sale of flare gas to reduce flaring activities, while also cutting down on greenhouse gasses.

Gas flares are gas combustion devices used at industrial plants, such as petroleum refineries, natural gas processing plants as well as at oil or gas production sites, to eliminate any excess gasses.

The flaring of natural gas from oil production is a major source of carbon dioxide emissions, one of the most worrying greenhouse gases.

The government hopes that companies will reduce their flaring activities by selling the excess gas.

“Flare gas can be used for power plants, households and industry through pipe gas, compressed natural gas [CNG], liquefied petroleum gas [LPG], dimethyl ether, or it can be used for other purposes based on its composition,” as stated in Ministerial Decree No. 32/2017, which came into force last Monday, but was only made public over the weekend.

According to the new regulation, flare gas will be put on offer by the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), which will evaluate documents submitted by potential buyers along with the ministry’s oil and gas directorate general.

The energy and mineral resources minister will determine the final gas allocation. The minister will also be responsible for setting the sale price of the flare gas, based on SKKMigas recommendations.

The ceiling price has been set at 35 US cents per million metric British thermal unit (mmbtu). (tas)

Source: Jakarta Post