Indonesia's Pertamina plans to raise the price of its liquefied natural gas in an attempt to cover the cost of building planned LNG plants.
OPEC News Agency (Opecna) reported the Jakarta Post newspaper, quoting Pertamina Pres. Faisal Abda'Oe, said the company had explained the reasons for the price increase to buyers. Buyers regard the plan for the LNG price hike as reasonable, Abda'Oe was quoted as saying.
Abda'Oe declined to disclose the details of Pertamina's plan.
The price of Indonesian LNG is currently determined by the price of a basket of the country's crude oils, foreign exchange rate developments, and inflation.
Abda'Oe said the December 1993 price of about $2.90/MMBTU, was up 20 from November. Pertamina's LNG price will remain competitive on the world market even after the planned increase, he said.
LNG PRODUCTION
Pertamina, the world's largest LNG exporter, produces as much as 24 million tons/year of LNG from six production units at Arun, Aceh, on the northern tip of Sumatra, and six plants in Bontang, East Kalimantan.
Production is to jump to 26 million tons/year early this year. Most of the LNG is shipped to Japan, with the remainder going to South Korea and Taiwan.
Opecna said sources in Jakarta believe Indonesia will need a price of $45/MMBTU to finance the megaprojects it plans for LNG production.
A 1990 study placed the cost of Pertamina's planned Natuna Sea LNG development at about $17 billion. However, industry sources say that could balloon to $30 40 billion. Pertamina was reported ready to conduct a cost reduction study soon in a bid to shave about $2 3 billion off the cost.
RESEARCH PROGRAM
Abda'Oe also disclosed that Pertamina is cooperating with local universities and the Oil and Gas Research and Development Agency (Lemigas) on surveys and research for oil and gas exploration and development.
Through the universities and Lemigas, Pertamina has spent $2.13 million during 5 years for research on geothermal exploration, seismic surveys, and enhanced oil recovery.
"It is time for Pertamina to have its own center for research and development of oil and gas (in order) to improve its competitive edge," Abda'Oe said.
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