Price of Tangguh LNG to Fujian, China is expected to rise close to international commodity prices in the range of U.S. $ 5 to $ 7 per mmbtu from the current price of U.S. $ 3.35.
Deputy Control, Operations Executive Agency for Upstream Oil and Gas (BP Migas) Rudi Rubiandini suggested setting range for the production of LNG from Tangguh to Fujian was a scenario prepared by BP Migas to renegotiate with the Chinese consumer.
Along with crude oil prices in international market which is now at the level of the range of U.S. $ 100 per barrel, LNG prices also go up to U.S. $ 10 per mmbtu. Meanwhile, domestic gas prices around U.S. $ 5 per mmbtu. In the LNG trade, the unit normally used is tons or Btu. For 1 Btu is equivalent with 0.454 kg.
However, Rudi acknowledged, BP Migas renegotiation team is not easy to change the previously agreed price. Special to renegotiate the price of LNG exports to Fujian, BP Migas will use the formula above the upper limit of the benchmark price of crude oil according to the JCC.
In 2002, LNG export contract to Fujian JCC agreed upper limit of U.S. $ 24 per barrel, so that the gas price average of U.S. $ 2.4 per million Btu.
Four years later, the government also renegotiate with Fujian and get the new price, ie U.S. $ 3.35 mmbtu. The price is valid until now.
Source: Bisnis Indonesia, January 3, 2012
