By DEDEN SUDRAJAT
JAKARTA -- Indonesia will send a delegation to China later
this month to seek a higher price for its liquefied natural
gas, the head of oil and gas upstream watchdog SKK Migas
"We've met with Cnooc officials" during their visit last
week, Rudi Rubiandi told reporters. "Our delegation will go to
China on May 30."
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/bbl, resulting in a selling
price of $3.45/MMBtu, Energy and Mineral Resources Minister
Jero Wacik said last week.
Although the price is higher than the initial contract in
2002, it pales in comparison with the current domestic price of
Mr. Rubiandini said Monday that the delegation will
renegotiate the sales price to be in line with the domestic
"We hope to get the highest price, but we expect a minimum
of $6/MMBtu," he added.
Dow Jones Newswires