Determination of Natural Gas Price by Netback Market Value Method

Bustan, M. Djoni (2011) Determination of Natural Gas Price by Netback Market Value Method. 4th International Conference on Sustainable Energy and Environment (SEE 2011):. ISSN 978-616-202-576-1

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    About 50% of natural gas in Indonesia is exported to other countries despite of the demand of natural gas is relatively high, 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 become an energy exporter for a long time, and has subsidized the cost of its domestic energy supply. Natural gas is one of the fuels which have been 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 paper, the determination of natural gas price for domestic consumption in Indonesia using netback market value is investigated. he method takes into account prices of all competitive 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 will provide 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 will be used to calculate natural gas price and analyzed in comparison with the actual price. The result will be useful for the policy makers to set the price of natural gas and the countrys energy plan in order to secure continuous supply of natural gas.

    Item Type: Article
    Subjects: T Technology > TP Chemical technology
    Divisions: Faculty of Engineering > Department of Chemical Engineering
    Depositing User: Budi Santoso
    Date Deposited: 09 Jan 2013 11:30
    Last Modified: 04 Jun 2013 04:49

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