SK voices concerns over Pertamina?s IDD price
Tuesday, August 5 2014 - 02:19 AM WIB
South Korean firm SK Corp has voiced concerns the price offered by state owned oil and gas firm PT Pertamina for the LNG to be produced from gas from the IDD project owned Chevron Indonesia Company in Makassar Strait.
An industrial source said the South Korean firm has sent a letter to upstream authority SKK Migas in which it was asking for determination on the part of Indonesia regarding the price of IDD?s LNG price.
According to the firm, it had reached agreement on the price of the IDD?s LNG with Chevron when the latter acted as the lead negotiator for Indonesia. The agreed-on price is US$13.9 per mmbtu. Pertamina later joined the negotiation team and even become the lead negotiator. Pertamina raised the price of the IDD?s LNG by 30 cents to $14.2 per mmbtu. SK rejected the new price proposal, which prompted Pertamina to send a letter saying ?Take it or leave it?.
?The negotiaton has been resumed with Pertamina still the lead negotiator,? the source said.
The source said when SK reached agreement with Chevron on the price, the South Korean firm agreed to offtake 60 percent of the IDD?s production. POSCO, another LNG buyer in South Korea, is also willing to buy the IDD?s LNG on terms and conditions similar to those given to SK.
?The negotation is in progress I dont know if SK is still willing to buy 60 percent of the IDD?s production. With regards the price, SK seems to stick to the $13.9 per mmbbtu price,? the source said.
Editing by Johannes Simbolon