Pertamina official says flexibility needed in negotiations with LNG buyers
Saturday, April 5 2003 - 03:33 AM WIB
?Flexibility is necessary in our negotiations with them,? Pertamina?s downstream director Muchsin Bahar told reporters.
Muchsin did not elaborate, however. He only said that Indonesia was facing cut-throat competition with other LNG producing countries from Asia, and with Australia.
He said earlier that Indonesia would be willing to cut prices for new contracts, but new prices would not be as low as the prices of LNG from Tangguh, Papua as demanded by Japanese buyers. Indonesia last year signed a long-term contract to supply Tangguh LNG to China?s Fujian province.
Some Japanese buyers commonly referred to as ?Western Buyers? had asked for LNG price cut from their existing contracts citing too high price as reason. They have so far imported LNG from Bontang, East Kalimantan, and Arun, Aceh.
Indonesia is scrambling to secure contract extension from Japanese buyers since more than 12 million tons per year of Indonesia LNG contracts to Japan will expire by 2011.
They had indicated that they would be willing to extend their LNG contracts if Indonesia agreed to reduce prices to the level set for Tangguh LNG. Indonesia last year signed a long-term contract to supply LNG from Tangguh, Papua, to China?s Fujian province.
Meanwhile, reports said that the Japanese buyers preferred short-term contracts after their current contracts expire. The buyers are reportedly trying to secure such contracts with Malaysia and Australia.
Muchsin said Friday that Japanese buyers were ?fanatic? on Indonesian LNG so that Indonesia should make full use of it.
He added that supply security was a crucial factor for Japanese buyers.
Indonesia has repeatedly sent officials to Japan to seek buyers to support its planned seven millions ton per year Tangguh plant. (godang)