Indonesia to seek higher price from China for LNG

5/14/2013

Indonesia to seek higher price from China for LNG

BY DEDEN SUDRAJAT

JAKARTA -- Indonesia will send a delegation to China later this month to seek a higher price for its LNG, the head of oil and gas upstream watchdog SKK Migas said.

We've met with Cnooc officials during their visit last week" Rudi Rubiandi told reporters. "Our delegation will go to China."

Cnooc is the biggest buyer of LNG Tangguh, located in Indonesia's Papua.

Under the existing contract, Indonesia can renegotiate the price when oil prices shoot up. The price of oil strongly correlates with the price of natural gas and LNG.

The current contract, signed in 2006, uses a formula which assumes an oil price cap of $38 a barrel, resulting in a selling price of $3.45 per million British thermal unit, Energy and Mineral Resources Minister Jero Wacik said.

Mr. Rubiandini said that the delegation will renegotiate the sales price to be in line with the domestic range.

Dow Jones Newswires

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