Monday, March 05, 2007

Indonesia to increase selling price of Tangguh LNG

Indonesia wants to renegotiate the price of a liquefied natural gas deal to South Korea, less than a year after it forced a major Chinese customer to pay more. Soaring construction costs, sustained higher oil prices and a shortage of LNG before 2012 has emboldened producers such as Indonesia, until last year the world's biggest exporter, to demand significantly higher long-term prices from consumers, Reuters reported.

"Currently, there are talks to increase our price to South Korea and a diversion of some of our sales from the West Coast (of the United States) to the Japanese market," energy minister Purnomo Yusgiantoro said in a written statement to the Indonesian national parliament.

The country has a contract to supply a total of 1.1 million tonnes of LNG to two Korean companies for the next 20 years from its Tangguh field in Papua Barat (West Papua)_province, operated by BP with Japanese and Chinese partners.

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