Govt demands new LNG price for Fujian effective retroactively

By Bernard Loebs

Indonesia will demand the new price for LNG delivered to China?s Fujian region from the Tangguh LNG plant in West Papua be retroactively effective beginning Jan. 1, 2013, upstream authority SKK Migas said on Tuesday.

?By contract, we understand that the result of (future) renegotiation on the price of LNG for Fujian will be effective retroactively beginning Jan. 1, 2013,? SKK Migas? Commercial Control Deputy Widhyawan Prawiraatmadja told Petromindo.com.

He did not explain about the current status of the renegotiation but according to sources, the renegotiation has yet to start. The Indonesian government has set up a team for the renegotiation months ago, comprising top governmental officials, but the team had yet to depart for China.

The government wants to renegotiate because the price which was agreed upon by the Indonesian and Chinese governments many years ago was much too low compared to the current price of the fuel.

Editing by Johannes Simbolon