Kansai asks Indonesia to review LNG prices
Friday, January 30 2015 - 11:31 AM WIB
Japanese firm Kansai Electric Power Co. Inc. expects Indonesia to set its LNG prices based on the prevailing market conditions, according to a senior official of the firm.
Managing Executive Officer of Kansai Yoichi Mukae said Indonesia should set competitive prices for its LNG, eliminate the so-called Asian Premium, and show flexibility with regards contract terms and period.
?We hope there is a swift decision making so that opportunities are not missed. (We want a) faster decision in contract discussion and contract implementation, and faster decision on allocation to domestic demand or LNG exports,? he said during the 7th International Indonesia Gas Conference & Exhibition (IndoGas) in Jakarta.
The LNG market in the Asia-Pacific has been slowing down lately following the slump in the global crude prices as a result of oversupply.
Traditionally, LNG price in the Asia-Pacific region is higher than those in Europe and the United States, two other world largest LNG markets, since LNG in the region is sold under long-term contracts which link the price of the fuel to the price of crude imported by Japan, better known as Japanese Crude Cocktail. This is called the Asian Premium. Meanwhile, LNG?s price in Europe and the U.S. is set based on the supply-demand balance.
Editing by Johannes Simbolon