Indonesia to lower LNG price under contract with South Korea

Jun 23, 2004 02:00 AM

Indonesia has indicated that it is ready to give South Korea a cheaper price for LNG under a new long term contract.
Head of the oil and gas upstream regulatory agency (BP Migas) Rachmat Sudibyo said it may accept a request of Korea Gas (Kogas) for a 40 % price discount provided that the Korean buyer agrees to sign a new 20 year contract after the termination of the present contract in 2007.

Kogas has asked a cut from a price of $ 5 per mm Btu set by BP Migas to $ 3, the same level given by Indonesia to Chinese buyers. Kogas, however, wanted only a short term contract of 7 to 10 years.
Rachmat said it is difficult to accept the Korean request under short term contract.

Under the present contract Indonesia supplies 2.8 mm tons of LNG to South Korea at a price of $ 4.5 per mm Btu over a 20-year contract.
Despite competition from other suppliers, Rachmat said he was optimistic that Kogas will choose Indonesia as its supplier.

Source: Asia Pulse
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