Natuna gas price renegotiation with Petronas faces hurdles

The price renegotiation for gas from ConocoPhillips-operated South Natuna Sea Block B with Malaysian oil and gas firm Petronas is not smooth. The Malaysian side opposed the clause stating that the extension of gas contract is linked with commercial price of the gas.

Nevertheless, the Malaysian buyer hinted that it would accept the gas price rise to above US$5 per MMBTU.

?The main hurdle is the opposition of Petronas to the clause that gas contract price is linked with commercial gas price factor,? a source familiar with the negotiation told Petromindo.com.

The source said the Indonesian party wants to insert the clause in the contract.

Separately, spokesperson of upstream oil and gas regulator BPMIGAS, Gde Pradnyana, declined to comment on the report. ?We?re still negotiating,? he simply said.

Earlier, BPMIGAS Chairman, R. Priyono, said that Petronas has been willing to pay US$5.5 per MMBTU from current price of $2.7 per MMBTU. Priyono however said Indonesia still wanted to push price to above $6 per MMBTU.

ConocoPhillips supplies gas from Natuna Sea Block B to Petronas?s Duyong gas platform in Malaysia since 2002 under 20-year contract with volume of around 250 MMCFD. (godang)