RI seeks to up price of Tangguh LNG for Fujian to $9 per mmbtu
Wednesday, June 4 2014 - 02:06 AM WIB
The Indonesian government is seeking to triple the current price of LNG from the Tangguh plant exported to China?s Fujian Province, after an earlier proposal for a much higher price failed.
Minister of Energy and Mineral Resources Jero Wacik said on Tuesday that the Indonesian negotiating team and its counterpart from Fujian were currently in negotiation talks, with the latter had agreed on a price of $7 per mmbtu, doubling the current selling price of $3.4 per mmbtu.
?The (negotiating) teams are currently working effectively, and yesterday they (Fujian) agreed on a $7 per mmbtu price,? he said.
Jero, however, said that he was not satisfied with the $7 price level, and that the government team was still persuading Fujian to raise the price to $9 per mmbtu. He said that this price was quite reasonable given the current higher market price and the fact that Fujian has been importing LNG from Qatar at $13 per mmbtu.
He hoped that a deal could be made before the current administration?s term ends in September of this year.
He said that with $7 per mmbbtu, Indonesia is set to earn revenue of $940 million, or nearly Rp 10 trillion, per year from the LNG export to Fujian. A higher price of $9 would give revenue stream of $1.2 billion per year, he added.
Deputy for Commercialization Control at upstream oil and gas authority SKK Migas Widhyawan Prawiraadmadja said earlier in March that the government of Indonesia had proposed for the selling price of LNG from the Tangguh plant exported to Fujian terminal to be revised upward to $11 per mmbtu to better reflect current market price.
Elsewhere, Jero said that there were no talks about canceling the Fujian LNG export contract.
Editing by Reiner Simanjuntak