LNG pricing to be re-formulated using Henry Hub

By Febry Silaban

The government will modify the export LNG pricing by using the formula of Henry Hub in the near future, according to an official of upstream authority SKK Migas.

?With huge LNG production potential from the US, where the price of LNG is referred to Henry Hub, the international LNG buyers have suggested that the price of our LNG should also be referred to Henry Hub aside from JCC (Japan Crude Cocktail),? Head of Gas Commerce Division at SKK Migas Arief Riyanto told Petromindo.com.

He said that his agency is still evaluating the plan together with the directorate general of oil and gas at the Ministry of Energy and Mineral Resources.

"The LNG price will be applicable to long-term contracts, and LNG exports from the US will start in 2018 at the earliest,? he said.

Editing by Johannes Simbolon