Two teams negotiate revision of Tangguh LNG price

The government has set up two special teams to deal with the renegotiation of the Fujian LNG contract, the Bisnis Indonesia newspaper reported in its Thursday edition.

A technical team will calculate the price based on the calculations of the OPEC (Organization of Petroleum Exporting Countries) and the IEA (International Energy Agency) and analyze the price.

The other one is negotiating team, which is already in China. This team conducted negotiations until Wednesday.

Besides this, the government has already asserted that the price of LNG (Liquefied Natural Gas) from Tangguh project --which will be sent to Fujian, China ? must be based on the average estimated price of the OPEC countries and the IEA as well as several world oil analysts.

As long as the average price is not agreed by the China National Offshore Oil Corporation (CNOOC), the negotiations will continue until there is a consensus between Indonesia and China.

?There is scenario that is pessimistic and there is also an optimistic scenario, which will be the basis for the future. Certainly, they (Chinese) have also their own argument, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said after discussing the draft law on mining, minerals and coal with the members of the House of Representatives? Special Committee in Jakarta on Wednesday.

Purnomo said the calculation of the ceiling price was based on the OPEC?s oil price forecast of US$25 per barrel. As a result the LNG price was fixed at $2.4 MMBTU (million British thermal unit), much below than the current international price of $8 per MMBTU. (*)