LOS ANGELES, Feb. 15 -- Indonesia is renegotiating the price of LNG under a contract it signed with China's Fujian LNG Project in 2002, according to Minister for Energy and Mineral Resources Purnomo Yusgiantoro.
He said the rate for supplies of LNG from BP PLC's Tangguh LNG project in Papua New Guinea, to Fujian, mainland China, needed to be renegotiated since oil prices have risen sharply since the contract was agreed.
Under the 2002 contract, Yusgiantoro said, the LNG price was set at $2.60/MMbtu if world oil prices exceeded $25/bbl. "The price [of oil] has risen far above that, so we're renegotiating it," he said.
The Fujian contract covers LNG supply of 2.6 million tonnes/year over a 25-year period beginning with the first shipment at yearend 2008.
The Tangguh LNG plant has secured long-term LNG sales with three other groups in addition to the Fujian LNG project: K-Power Co. Ltd. and POSCO, both of South Korea, and Sempra Energy LNG Marketing Corp., Mexico.
Contact Eric Watkins at [email protected].