China raises Tangguh LNG price for Fujian to $8
Tuesday, July 1 2014 - 12:11 AM WIB
China National Offshore Oil Corporation (CNOOC) has agreed to raise the price of LNG from the Tangguh plant in West Papua to Fujian terminal to US$8 per mmbtu from $3.3 at present.
?The price of LNG Tangguh has increased significantly and will move depending on the crude price. This is a good news for us,? Jero Wacik, Minister of Energy and Mineral Resources, told reporters at the state palace.
He said under the first contract signed during President Megawati Soekarnoputri, the price of the LNG is linked to the Japan Crude Cocktail (JCC) and the JCC was capped at $26 per barrel. It was later revised upwards to $36 per barrel. CNOOC has agreed to remove the ceiling price.
If the JCC price is $100 per barrel, the price of the LNG is set at $8 per mmbtu. Should the JCC price rises to$110 per barrel, the LNG price will increase to $8.65 per mmbtu, he said.
Jero said Tangguh will get US$20.8 billion in revenue from Fujian through 2034 based on the new price. In comparison, Indonesia will only get $5.2 billion under the new price until 2034 under the old price.
?Starting this year, we shall get Rp 12.5 trillion per year from Fujian. In the previous years, we only get Rp 3.1 trillion per year. Thus, there will be an additional income of Rp 9 trillion,? he said.
Editing by Johannes Simbolon