PLN has yet to submit Tangguh LNG price to government
Monday, June 25 2012 - 08:59 AM WIB
State owned electricity firm PT Perusahaan Listrik Negara (PLN) has yet to submit the result of its negotiation with British energy firm BP Plc, the leader of Tangguh consortium, on the price of LNG to be supplied to the former?s power plants, according to Director General of Oil and Gas Evita H. Legowo.
?We have yet to officially receive the letter containing the result of negotiation on Tangguh (LNG price) between PLN and BP Indonesia. The negotiation is not done yet. I keep following the news about the negotiation,? Evita told Petromindo.com on Monday.
Her statement came following strong criticism expressed by Vice Minister of Energy and Mineral Resources Rudi Rubiandini last week over PLN?s alleged agreement with BP to buy Tangguh LNG for between US$13-14 per mmbtu ? which Rudi said exceeds Indonesia?s average export price for the fuel. He dismissed the price proposed by PLN as a ?stupidity?.
It remains unclear if Rudi, in voicing the criticism, referred to the price that was still being negotiated by PLN and BP or the one that has been agreed upon by both parties during negotiation and has been submitted to the ministry for approval.
PLN?s President Director Nur Pamudji confirmed the negotiation between PLN and BP on the price was ongoing, but he expected it could be finalized this year.
?We prefer a slow-but-sure attitude during negotiation. We are not in haste. If they (BP) offer high price, we?ll ask for low price. After all, it is the government that will decide on the price,? he said.
PLN signed on May 24 a Memorandum of Understanding (MoU) with BP on LNG supplies from Tangguh to the former?s power plants in North Sumatra and Jakarta. Under the MoU, PLN will get LNG supplies amounting to 230 mmscfd starting October 2013, comprising 110 mmscfd for its power plant in Belawan, North Sumatra and 120 mmscfd for its power plant in Jakarta.
Editing by Johannes Simbolon