Price formula for Senoro gas should be reviewed: BPMIGAS

BPMIGAS, the regulatory body for upstream activities, has asked PT Donggi-Senoro LNG, the consortium that plans to build an LNG plant in Central Sulawesi, to change the price formula for the plant?s LNG product, Kompas reported Wednesday.

The agency?s Chairman R. Priyono said in Jakarta on Tuesday that the price formula should be changed so that it would have a floor price to prevent the government from incurring financial losses from the fluctuation of gas prices.

?We want the price formula to have a floor price of US$3.8 per MMBTU when the oil price is about $40 per barrel,? he said.

Under the agreement signed on Jan. 22, 2009, the consortium uses a price formula without floor and ceiling prices.

Pertamina has a 29 percent stake in the project, with Mitsubishi Corp. and Medco holding 51 percent and 20 percent, respectively.

The partnership plans to build a 2-MTPA LNG plant. Gas for the proposed plant will be supplied from Matindok Block, which is operated by Pertamina, and Senoro-Toili Block, which is jointly operated by Pertamina and Medco. The LNG plant would be built by Mitsubishi and Pertamina and Medco will sell gas to the LNG plant at well head. (*)