A South Korean gas company, Korea Gas (Kogas), is ready to buy liquefied natural gas (LNG) from Indonesia`s Tangguh field in Papua at US$20 per MMBTU (million british thermal unit), an Indonesian energy official said.The price Kogas was prepared to pay would be the highest Indonesian LNG had ever fetched, Eddy Purwanto, deputy for operations to the head of the Upstream Oil and Gas Executive Agency (BP Migas), said here Wednesday.
"Currently, we are negotiating the volume and delivery period," he said.
Kogas would possibly buy up to one million tons per year deliverable from 2010 to 2012.
The price would include cif and was based on the assumed Japan Cocktail Crude (JCC) price of US$120 per barrel.
The deal with Kogas was an option in the diversion of a contract with Sempra involving a maximum volume of 1.8 million tons per year.
Purwanto said the Sempra contract would also be switched to Japan and Thailand.
"We have been negotiating the plan with Tohoku in Japan and PTT in Thailand," he added.
With the diversion of the Tempra contract, the average price of LNG from the Tangguh field would be 8.21 US dollars per MMBTU with the assumed JCC price at US$120 per barrel and the assumed South California (SoCal) gas price at US$10 per MMBTU.
"The value of contracts on LNG from Tangguh will have the potential of increasing to 19.7 billion US dollars," he said.
source: Antara | July 2008
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