Japanese buyers threaten to cancel plan to buy LNG from Donggi-Senoro
Friday, April 3 2009 - 02:01 AM WIB
The newspaper said that Kansai and Chubu had asked a consortium of PT Pertamina, PT Medco Energi Internasional and Mitsubishi Corp. which would build a LNG plant in Senoro, South Sulawesi to get the Indonesian government?s approval for their Sales Appointment Agreement (SAA) or sales contract agreement.
If not, the two Japanese companies would cancel the Head of Agreement (HOA) on their plan to buy LNG from the consortium, which expires on March 31.
Pertamina?s Vice President for LNG Businesses Hari Karyuliarto said that the consortium had asked Kansai and Chubu to extend the HOA expiry to three weeks to give them time to get the government?s approval.
?But we have not yet received the formal approval from the Japanese companies,? he added.
Separately, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Thursday that he had not yet received any request to approve the SAA signed by the consortium and the two Japanese companies.
That means the government has yet not agreed on the selling price set by the consortium. ?The request for the approval of the selling price has yet to reach my desk," he said.
In March, BPMIGAS, the regulatory body for upstream activities, asked PT Donggi-Senoro LNG, the consortium that plans to build an LNG plant in Central Sulawesi, to change the price formula for the plant?s LNG product.
The agency?s Chairman R. Priyono said on March 17, 2009 that the price formula should be changed so that it would have a floor price to prevent the government from incurring financial losses from the fluctuation of gas prices.
The partnership plans to build a 2-MTPA LNG plant. Gas for the proposed plant will be supplied from Matindok Block, which is operated by Pertamina, and Senoro-Toili Block, which is jointly operated by Pertamina and Medco. The LNG plant would be built by Mitsubishi and Pertamina and Medco will sell gas to the LNG plant at well head. (*)