Indonesia intensifies effort to increase Tangguh LNG price

Indonesia has intensified effort to further increase LNG price from BP-led Tangguh project to Fujian, China by forming a negotiating team led by former foreign minister Ali Alatas to lobby the Chinese government, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Thursday.

?We seek understanding from Chinese government to improve Tangguh LNG price due soaring crude price. We realize a contract is a contract, but at current state of oil price, it?s only fair for Indonesia to ask for(upward) price revision,? Purnomo said, adding that a clause in the contract also allowed Indonesia to ask for price revision.

Purnomo said the team will communicate Indonesia?s proposal up to the country?s powerful politbiro.

China state-owned oil firm CNOOC has contract to import 2.6 MTPA of Tangguh LNG to its Fujian 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 but capped at certain price. (godang/Bernard)