Hopefully the higher Tangguh LNG Price will also benefited Papuan.
JAKARTA, March 14 (Reuters) – Indonesia will ask China National Offshore Oil Corp. (CNOOC) to increase its price for liquefied natural gas (LNG) from the BP-led (BP.L: Quote, Profile, Research) Tangguh project in Papua, an energy watchdog official said on Friday.
CNOOC (CEO.N: Quote, Profile, Research)(0883.HK: Quote, Profile, Research), which has a 17 percent stake in Tangguh, has contracted to lift 2.6 million tonnes a year — about a third of its capacity — over 25 years to a new terminal in Fujian.
In 2006, Indonesia agreed to raise the price of LNG from Tangguh sold to China’s CNOOC to an oil-equivalent of $38 a barrel versus the previous $25 level. The decision was made when the oil price was at $70, as opposed to above $100 now.
“We will ask China to increase the LNG price because currently oil price is very high,” Kardaya Warnika, chairman of the watchdog, BPMIGAS, told reporters.
“We have succeded in the past in asking for better prices and we will try again this time,” Warnika said.
U.S. crude for April delivery CLc1 fell 47 cent to $109.86 a barrel by 0930 GMT on Friday.
Tangguh has also secured contracts to supply 3.7 million tpy to the U.S. West Coast via Mexico and 1.1 million tpy to South Korea. It is expected to produce 7.6 million tpy from two trains, with output expected from the fourth quarter of 2008.
For Indonesia, the world’s second-biggest supplier of the super-cooled gas, the Tangguh project will help offset declining output from other LNG facilities and provide much-needed revenue.
The Tangguh project is about 3,000 km (1,880 miles) east of Jakarta.
Separately, Energy Minister Purnomo Yusgiantoro said on Friday Indonesia wanted gas to be priced better as global oil prices rose.
Indonesia, Asia Pacific’s only OPEC member, is far richer in gas than in oil.
The minister declined to comment on whether Indonesia would propose forming a gas cartel when gas producers meet in Moscow later this year.
“We will support if there are ideas for better gas prices.”
Indonesia is a member of the so-called Gas Exporting Countries Forum, an informal club of the world’s major gas exporting nations. Other members include Russia, Qatar, Venezuela, and Nigeria. (Reporting by Muklis Ali, Editing by Ed Davies)