VIVAnews – The government is preparing a renegotiation strategy over the prices of liquid natural gas (LNG) in Tangguh set for Fujiyan, China, to get the best deal possible. The government is targeting that the renegotiation of overly low gas prices is to be completed in 2013.
Director General of Oil & Natural Gas of the Ministry of Energy & Mineral Resources, Evita Legowo, said the government’s renegotiation team chaired by the Coordinating Minister for the Economy, Hatta Rajasa, has been in talks about the issue with some parties.
“We're still in serious talks about the future strategies,” said Evita on Thursday.
According to Evita, the government will start discussing with China about the renegotiation between June and July 2012.
The Coordinating Minister for the Economy, Hatta Rajasa, said earlier that the Indonesian government wants Tangguh’s gas price which is to be offered to Fujiyan, China, adopts the international price.
He said the LNG gas selling price to Fujiyan, China, is too cheap.
Tangguh’s LNG contract to Fujiyan, China of 2.6 million ton per year was renegotiated in 2006 and was raised to US$3.35 per MMBTU, which was still far below the international LNG price.
Operational Control Deputy of Oil and Gas Regulator, Rudi Rubiandini, said if Indonesia’s crude oil price (Indonesia Crude Price/ICP) is within the range of US$100 per barrel, then the ideal selling price of Tangguh’s LNG should be around US$5-7 per MMBTU.
