BPMIGAS team to travel to China to renegotiate LNG price
Wednesday, November 7 2012 - 02:48 AM WIB
A team from Indonesia?s upstream oil and gas authority BPMIGAS is scheduled to fly to Fujian, China, in the second week of November to renegotiate for a higher selling price of LNG produced by the BP-operated Tangguh LNG project in West Papua.
?The BPMIGAS team will travel to Fujian next week,? a source told Petromindo.com Wednesday.
Meanwhile, Minister of Energy and Mineral Resources Jero Wacik hopes that the LNG price renegotiation can be successful.
?We?ll renegotiate (the LNG contract) with Fujian,? Jero said, while adding that China has insisted on the current contract which is valid until 2029. ?But the contract says there?s opportunity for price negotiation ? That?s why I will fight in Fujian,? he said.
The price of LNG from Tangguh project sold to Fujian, China, was based on Japan Coctail Crude (JCC) oil price. Initially, the gas price was based on JCC oil price upper limit of US$25 per barrel, which was at US$2.4 per MMBTU. In 2006, the JCC oil price upper limit was at $38 per barrel and the gas price was adjusted to $3.35 per MMBTU, which remains until now. The gas price is considered far too low, prompting the government to renegotiate the gas price.
Editing by Reiner Simanjuntak