Indonesia, China start renegotiation on price of LNG for Fujian
Saturday, May 11 2013 - 01:16 AM WIB
Indonesia and China have started renegotiation on the price of LNG from the Tangguh LNG plant in Papua to the LNG receiving terminal in Fujian province of China, according to upstream authority SKK Migas.
?Negotiation on the price of gas for Fujian has started. Indonesia has yet to determine the price target it wants to achieve. Indonesia thus needs to continue negotiating intensively,? SKK Migas?s Chairman Rudi Rubiandini said in a statement on Friday.
Meanwhile, Minister of Energy and Mineral Resources Jero Wacik said on Friday that the ministry and the Chinese government have set up its own task force to renegotiate the Fujian LNG price. The Chinese government had expressed its willingness to revise the price.
?Once both parties reach an agreement, the Indonesian government will go to Beijing, China to sign a contract with new price? The new price is expected to generate US$1 billion in additional revenue to the government,? he said.
He said Indonesia now sells Tangguh LNG to Fujian for US$3.45 per million British thermal unit (mmbtu), which is too low compared to the international price which now reaches $16 per mmbtu. The price is even lower than the domestic price which now reaches $10 per mmbtu.
Editing by Johannes Simbolon