Pertamina willing to buy LNG from Tangguh at higher price

State oil and gas company PT Pertamina said it is ready to purchase liquefied natural gas (LNG) from Tangguh LNG project three times the price of LNG currently charged by BP, Tangguh operator, to Fujian China.

?We have proposed to the government to renegotiate gas purchase contract between BP Tangguh and Fujian. We are willing to purchase the price of LNG (from Tangguh) three times the price it sold to Fujian,? said Vice President for Corporate Communication of PT Pertamina, Mochamad Harun.

The sale price of LNG to Fujian China currently set at US$3.35 per MMBTU, far lower than the price of LNG from Badak LNG plant in East Kalimantan to buyers in Japan at US$16 per MMBTU.

Pertamina is seeking to secure LNG, including from BP Tangguh, to supply its floating storage and regasification unit (FSRU) in Jakarta Bay, which is scheduled to begin operating early next year.

Harun said Pertamina has set up a negotiation team and hopes to get the LNG supply security in February 2012 as the FSRU Jakarta Bay is scheduled to start commissioning at end February 2012.

The West Java FSRU, is operated by PT Nusantara Regas (Regas), a joint venture of Pertamina and state-owned gas distributor PT Perusahaan Gas Negara (Persero) Tbk (PGN). The FSRU will have capacity of 3 million tonnes per year of LNG or equal to 400 MMSCFD.

The gas will be supplied to the Muara Karang and Tanjung Priok power plants in Jakarta, owned by state owned electricity firm PT PLN. (giok)