Pertamina refuses cutting LNG price under renewed contracts with Japan?s buyers

The government and state oil and gas firm Pertamina have refused to reduce the price of liquefied natural gas (LNG) to be bought by Japan?s importers under renewed sale and purchase contracts which are being negotiated, Pertamina president director Baihaki Hakim said on Tuesday.

?Minister Purnomo and I said No to them,? Baihaki told reporters before a parliamentary hearing.

They were Western buyers from Japan namely Osaka Gas, Kansas Electric Power & Co, Kyushu Electric and Chuba Electric. Their contracts to buy LNG from Bontang LNG plant in East Kalimantan will expire in 2010.

Baihaki said Minister of Energy and Mineral Resources Purnomo Yusgiantoro and himself had told the Japanese buyers that Pertamina could reduce LNG prices going to them if it came from Tangguh in Papua province. LNG to be shipped from Tangguh to China?s Fujian province would be lower than the current price of LNG going to the Western buyers of Japan, Baihaki said.

Baihaki said that, if renewed, supply contracts with the Japanese buyers would involve 6 million metric tons of LNG, which would come from Bontang.

Bontang LNG plant is operated by PT Badak NGL Co., which is 55 percent owned by Pertamina, 20 percent by Vico, 10 percent by TotalFinaElf, and 15 percent by Japan Indonesia LNG Co. (JILCO). (godang/leo)