PT Perta Samtan Gas | Sales and Delivery
7192
page-template-default,page,page-id-7192,ajax_updown_fade,page_not_loaded,boxed,,qode-title-hidden,footer_responsive_adv,qode-content-sidebar-responsive,wpb-js-composer js-comp-ver-5.1.1,vc_responsive
Sales & Delivery
  1. LPG Price Structure

 

There are many factors that go into determining the sales price of LPG and the following will describe all of these factors.

 

(1) World LPG Benchmark Pricing

 

LPG is an internationally traded commodity and influenced by international prices.

The international benchmark for the LPG is the Saudi Aramco Contract Price, also commonly called the CP.

The CP changes on a monthly basis, forcing price reviews at least once per month.

Indonesia does not have an influence on LPG price benchmarks, as Indonesian production of LPG is small compared to worldwide production.

 

  • About Saudi Aramco Contract Price (CP)

 

In the 1980s and 1990s, Saudi Arabia, who supplied more than half of world LPG trading volume, had a decisive influence on international LPG prices.

As a result, global LPG trading is determined by Saudi Aramco Contract Price (CP).

As the current international price in the market, Saudi Aramco Contract Price (CP) is expressed in $US per metric tonne. The CP is set on the propane and butane commodity prices, and published on the first business day of the month and remains fixed for the remainder of that month.

The CP is fixed monthly by an in-house committee formed of Saudi Aramco’s sales and marketing experts. The formula is based on 4 (four) elements:

a. market sentiment,

b. spot market assessments,

c. the values of naphtha and crude oil,

d. 3 (three) monthly spot sale tenders the results of which Saudi Aramco keeps confidential.

 

(2) Exchange Rate

 

The CP is expressed in US dollars per tonne.

As the international price for LPG is in US dollars, the Indonesia Rupiah exchange rate also affects the Indonesian sales price of LPG.

Exchange rates change numerous times per day, making the setting and publishing of prices even more challenging.

 

(3) LPG Transportation Cost

 

Transport costs and refinery terminal fees are also a significant part of the overall cost of delivered LPG.

Indonesian LPG is sourced from oil & gas fields, refineries and importers.

As these can vary across the different geographical locations of Indonesia, LPG sales price can also vary by location and distance from the source.

There are 3 (three) distance related transportation cost variables:

a. Distance from original source to the main terminal

b. Distance from the main terminal to the various local depots

c. Distance from the local depot to final location

 

(4) Volume Used

 

The cost of servicing a larger volume account is typically less than a lower volume account.

Delivering larger quantities, on a given delivery, is obviously more economical.

There are also equipment costs, account administration costs and other costs & considerations that, when spread across more volume, will affect the price.

As a result, the volume used affects the LPG sales pricing.

 

(5) Seasonality

 

The seasons can also affect LPG prices, as the worldwide demand is generally higher during the northern hemisphere winter.

In general, higher demand results in tightening of supplies and an increase in prices.

 

(6) Taxes

 

The government affects the price you pay for LPG through the application of taxes.

Value Added Tax (VAT) applies to all LPG Sales Price in Indonesia.

This adds 14% to the price of the LPG.

 

(7) Geo-Political Issues and Supply Interruptions

 

Embargos, wars and social unrest in LPG producing countries can adversely affect supply and drive prices upward.

Natural disasters, like earthquakes and fires, can also have an effect.

  1. PT Perta-Samtan Gasa��s LPG Sales

 

PT Perta-Samtan Gas has produced LPG and sold to the buyer, namely PT Pertamina (Persero) Integrated Supply Chain/ISC.

PT Perta-Samtan Gas’s LPG sales price is determined by Saudi Aramco contract prices (CP) which are Propane (C3) and Butane (C4), with following formulas :

 

LPG price = USD [(AxCPAPropane)+(BxCPAButane)-I]

CPA: Reference price of LPG for Propane and Butane published price of Saudi Aramco

A: Percentage of weight from the content of Propane & lighter

B: Percentage of weight from the content of Butane & heavier

I: is a certain number, depend on freight basis

 

Herewith, Saudi Aramco Contract Price (CP) and Crude Price (ICP) records are described as below.

 

Average Yearly Price – CP & Crude (ICP)
YearPropane (USD/MT)Butane (USD/MT)ICP (USD/bbl)
2010707.90717.5079.40
2011828.80870.80111.55
2012914.60917.90112.73
2013857.50884.60105.85
2014790.80810.4096.51
2015416.30436.7049.21
2016323.30355.8040.16
2017 (Jan~Sep)430.00476.6748.41

 

  1. LPG / Condensate Delivery

 

There are 4 (four) storage tanks of LPG and 1 (one) storage tank of Condensate at fractionation plant. The total storage capacity for LPG is 6,000MT which is consisted of 2 x 2,000MT (mixed LPG) and 2 x 1,000MT (propane), and Condensate storage capacity is 25,000bbl.

When we assume the full capacity operation, this storage capacity can cover for 8.5 days production of LPG and 12 days production of Condensate.

 

(1) Product Delivery Facility

 

While all of Condensate product is delivered by pipeline, LPG product is delivered by not only pipeline (4.2km) to Pertamina LPG filling station in Pulau Layang but also jetty. In order to use the jetty for product delivery, PT Perta-Samtan Gas has made a jetty lease agreement with Pertamina RUIII to use jetty #1 as a sharing operation condition during 15 (fifteen) years.

The product loading capacity through jetty is LPG 120MT/hr and Condensate 1,500bbl/hr which is considering the pump, metering and loading arm capacity. On the other hand, the LPG loading capacity through pipeline to Pulau Layag is 50MT/hr.

 

(2) Product Receiving Facility

 

Produced LPG is delivered to LPG filling station in Pulau Layang by pipeline to meet the LPG demand in South Sumatera region with daily delivery quantity about 300~400MT. Pertamina LPG storage capacity in Pulau Layang is about 1,255MT, and Pertamina distributes LPG to South Sumatera via tank truck (15 tons) and LPG cylinder (3~50kg).

Remaining LPG product is delivered to Dumai, Pangkalan Susu, Pontianak and Panjang by vessel (arranged by ISC, capacity 1,000~1,500MT per each vessel).

LPG distribution scheme by vessel is as follows, and 1 round trip is required for 7~10 days.

 

 

Meanwhile, Condensate is belongs to Pertamina EP, and whole product is delivered to Pertamina Refinery Unit III by pipeline (owned by Pertamina EP).

 

  1. PT Perta-Samtan Gas’s Delivery System

 

Whole product delivery flow can be divided into 3 (three) steps ;

(a) Planning Schedule (b) Monitoring Schedule (c) Implementing Delivery.

And there are several management factors in each steps as follows:

 

StepManagement FactorsRemarks
Planning ScheduleFeed gas supply rate (monthly)Confirm with Pertamina EP
LPG/Condensate productionForecast based on the feed gas rate/recovery rate/production day etc.
LPG vessel/pipeline delivery ratio (monthly)Confirm with Pertamina ISC
Monthly vessel lifting frequency 
Monitoring ScheduleDaily LPG/Condensate production and inventoryBased on tank gauging (current condition)
LPG/Condensate stock forecastWeekly/monthly forecast based on delivery plan
LPG production & delivery tank nominationStock simulation for each tank
LPG pre sample testConduct 3 days before vessel lifting schedule
Implementing DeliveryFinal sample test resultConduct before start delivery
Loading timeManagement consumed loading time from all fast upto loading finished
Loss management

Vessel) comparing number between tank gauging, metering and vessel gauging

Pipeline) comparing number between tank gauging and metering