BP, PGN have yet to reach a deal on LNG supply to Belawan FSRU

The British firm BP Plc-led consortium that operates the Tangguh LNG in West Papua has yet to reach a deal with state owned gas distributor PT Perusahaan Gas Negara Tbk (PGN) on supplies of LNG to a Floating Storage and Regasification Unit (FSRU) to be built offshore the Belawan port of North Sumatra.

 

?The negotiation has not been done yet. BP wants PGN to set a fixed schedule for the completion of the project,? Nico Kanter, BP?s head of country, said on Monday.

 

Meanwhile, Michael Baskoro, Development Director of PGN, said price remained a sticking point during the negotiation currently held by the firms.

 

?There is a problem with price that is supposed to be settled by the government. It is in the interest of the government that Tangguh sell its LNG at high price, but it is also in the government?s interest that PLN (state owned electricity firm PT Perusahaan Listrik Negara) buy the LNG at low price,? Michael said.

 

?We think the best alternative is a price similar to the one set for the Jakarta Bay FSRU. But, BP wants a higher price. So, we let the government decide,? Michael said.

 

The Jakarta Bay FSRU is being built by PT Nusantara Regas, a consortium of PGN and state owned oil and gas firm PT Pertamina, while the Belawan FSRU project is wholly owned by PGN. The Belawan FSRU project is mainly aimed to supply the gas needs of the combined cycle PLTGU Belawan Sicanang power plant.

 

Nico also said BP and PLN were in talks on the possibility of supply LNG for the LNG mini terminals that the state owned firms to build in western Indonesia. PLN has said it, together with Pertamina, plans to develop mini terminals in the region so that it can use cheaper gas rather expensive diesel oil for power generation in the region.

 

?The plan to build the mini LNG terminals needs further study so that the Tangguh LNG plant can accommodate their needs,? Nico said. (josef)