Minimum gas price for C. Sulawesi LNG project agreed

State oil and gas company PT.Pertamina and JSX-listed energy firm Medco Energi Internasional Tbk. had reached agreement with Japanese firm Mitsubishi Corp. on minimum price of gas supplied by Pertamina and Medco to the proposed Central Sulawesi LNG plant, which majority stake would be owned by Mitsubishi.

Pertamina Vice President Director Iin Arifin Takhyan said on Wednesday that the price agreement had been submitted to BPMIGAS for approval. He, however, declined to reveal the price.

An industrial source quoted by Bisnis Indonesia on Thursday reported that minimum price agreed for Pertamina and Medco?s gas is US$3.5 per MMBTU at plant?s gate.

Mitsubishi would own 60 percent of stake in Senoro LNG project, which would have capacity of 2 million tonnes per annum and operated under downstream industry and netback system, where the plant operator would pay gas producers based on actual LNG selling price minus costs plus margin. But In the event of LNG prices fall below $3.5 per MMBTU, the plant would pay $3.5 per MMBTU to gas producers.

Gas for the proposed plant would come from Pertamina and Medco operated Senoro-Toili block and Pertamina-operated Donggi block.

Mitsubishi will have 60 percent shares in the LNG plant and will also act as offtaker. Pertamina and Medco will equally shares the remaining balance.

Iin said that with the prolonged negotiation, the plant would become onstream in 2010, one year later than originally planned. (godang)