Indonesia asks CNOOC for further LNG price increase

Indonesia will ask China National Offshore Oil Corp. (CNOOC) to further increase its price for liquefied natural gas (LNG) from the BP-led Tangguh project in West Papua, a BPMIGAS top official said.

?Talks have been ongoing to ask for further price increase in line with soaring crude prices. We have been able to ask for price increase in the past and will try again this time,? Kardaya Warnika, Chairman of BPMIGAS told reporters on Friday.

CNOOC has contract to import 2.6 MTPA of Tangguh LNG to its Fujian LNG receiving terminal. CNOOC in 2006 had agreed to raise Tangguh LNG buying price by raising crude ceiling price from US$25 per barrel to $38 per barrel. Tangguh LNG price to Fujian is formulated as function of crude price, meaning the price would swing according to crude price movement.

Tangguh has also secured contracts to supply 3.7 MTPA to the U.S. West Coast via Mexico and 1.1 MTPA to South Korea. It is expected to produce 7.6 MTPA from two trains starting end of this year.

Kardaya also said similar effort to increase Tangguh LNG price to South Korean customers is also being made. (alex./godang)