Indonesian to Tap Tangguh LNG Profit

The Indonesian government expects revenue from oil and gas to increase if the renegotiated gas contract at Tangguh LNG plant concludes in June next year.

China Media Center has quoted Raden Priyono, the chairman of oil and gas regulator BPMigas, as saying that the government was trying to adjust the selling price of Tangguh LNG in accordance with the market price and was waiting for a compensation demand from the Chinese government.

“There will be compensation in the renegotiation. Fujian asks for something and we are waiting for it. The renegotiation will be concluded by mid-next year,” Raden said.

The officials did not disclose the new selling price.

Exports to Fujian accounted for 11 percent of the total production of 7.6 million tons per year from the Tangguh field, which is operated by British resource giant BP. It also has contracts to export gas to Japan, Korea and Taiwan, with shares of 41 percent, 38 percent and 9 percent, respectively. The selling price of Tangguh gas has been scrutinized as it is well below market price.

The current price for Tangguh LNG is $3.35 per million British thermal unit (mmbtu).