20 cargoes of Tangguh Train 1, 2 LNG for domestic market
Tuesday, November 6 2012 - 06:55 AM WIB
Minister of Energy and Mineral Resources Jero Wacik said on Tuesday that the Tangguh LNG consortium led by BP Plc. had agreed to allocate 20 cargoes of LNG from Tangguh Train 1 and 2 facilities for domestic market, aside from 40 percent of the LNG output from the planned Train 3 facility.
?We ? the Directorate General of Oil and Gas and BPMIGAS ? kept on fighting to get the gas. Finally, (they) agreed to give us more than 40 percent (of Tangguh?s LNG output),? Jero said.
He did not however specify when Tangguh will start delivering 20 cargoes from Train 1 and 2 to domestic market nor whether the amount will be fixed every year. According to Tangguh?s Work Plan and Budget (WP&B), the LNG plant will produce 110 cargoes this year. It has thus far produced and shipped 90 cargoes, BPMIGAS?s Head of PR, Security and Formality Division Hadi Prasetyo said recently.
Jero noted that aside from state owned electricity firm PT Perusahaan Listrik Negara (PLN), the LNG will be delivered to East Java-based state owned fertilizer firm PT Petrokimia Gresik.
The BP-led Tangguh consortium plans to invest up to US$12 billion to develop the Train 3 facility with a 3.8 mtpa capacity which will bring the total capacity of the LNG plant in West Papua province to 11.4 mtpa. The Train 3 is expected to start producing in 2018.
The price for LNG from the Train 3 has however not been fixed, prompting BPMIGAS to call on the government to quickly decide the price. ?It should the best possible price,? Deputy for Planning at BPMIGAS Widiyawan Prawiraatmadja said on Tuesday.
Separately, Director General of Oil and Gas Evita Legowo said that the government has yet to determine the domestic price of the Train 3 LNG, but it would be likely in the range US$11-13 per mmbtu.
Meanwhile, Jero said the government?s team is negotiating to raise the price of LNG from Tangguh to China?s province of Fujian. The sale price of LNG to Fujian is currently set at US$3.35 per MMBTU, far lower than the price of LNG from Badak LNG plant in East Kalimantan to buyers in Japan at US$16 per MMBTU.
Jero said the negotiation was tough as the Chinese buyer ?insists on paying the LNG at the current price until 2029.?
Editing by Johannes Simbolon