Pertamina concludes negotiation with Japanese LNG buyers

State owned oil and gas company PT Pertamina has concluded negotiations with a group of LNG buyers in Japan, known as Western Buyers, on the extension of contracts due in 2011.

"We have sent a proposal, which is the result of the final negotations, to the government," Pertamina's president Ari Soemarno said on Tuesday.

Ari however refused to unveil the contents of the proposal.

In April this year, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Indonesia and the Japanese buyers had agreed on the price of the fuel on FOB basis but no agreement had been reached regarding the price on CIF basis.

Under the FOB system, Japanese buyers will provide vessels to take the fuel from Indonesia, while under the CIF system, Indonesia will carry the fuel to Japan.

Indonesia and the Western Buyers recently agreed to extend the contracts that are due in 2011 for another 10 years with a lower contract volume.

Under the existing contracts, Indonesia has to export 12 million tons per year the Western buyers. Under the contract extension, Indonesia will export a total of 25 million tons ? three million tons in the first five years and two million tons in the last five years ? over a period of 10 years until 2021.

A senior official at oil and gas upstream regulator BPMIGAS has said the FOB price of the LNG that had been agreed upon by Indonesia and the Western Buyers was $15.9 per MMBTU, if the crude price is $100 per barrel (Godang)