ID :
17438
Sat, 08/30/2008 - 09:47
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Shortlink :
http://m.oananews.org//node/17438
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LNG CONTRACT RENEGOTIATING TEAM TO BE FORMED IN OCTOBER
Jakarta, Aug 29 (ANTARA) - The government's team to renegotiate Indonesia's liquefied natural gas (LNG) export contract with China is expected to be formed in October, and begin working before the first LNG shipment is made next year, a spokesman said.
"We hope the team can be formed in October," National Development Planning Minister Paskah Suzetta said here Friday.
The team would be led by Coordinating Minister of Economic Affairs Sri Mulyani Indrawati and include Energy and Mineral Resources Minister Purnomo Yusgiantoro.
"The team will be established based on a presidential decree," he added.
The 20-year contract on LNG supplies from the BP-managed Tangguh field in West Papua to China was signed in 2002 during the Megawati Soekarnoputri presidency.
The LNG price in the contract was recently found to be inordinately low. Based on the government's calculations, the price would lead to a potential loss of Rp750 trillion or some US$75 billion to the state.
The contract price was based on a formula using a crude oil price of only US$38 per barrel while the price of oil now had surpassed the level of US$110 per barrel.
Previously, an oil industry observer, Kurtubi, had said it would be better for the government to cancel the contract although Indonesia would then have to pay a penalty of US$300 million.
"But paying the penalty is better than the prospect of losing billions of rupiah over the next 25 years," he said.
"We hope the team can be formed in October," National Development Planning Minister Paskah Suzetta said here Friday.
The team would be led by Coordinating Minister of Economic Affairs Sri Mulyani Indrawati and include Energy and Mineral Resources Minister Purnomo Yusgiantoro.
"The team will be established based on a presidential decree," he added.
The 20-year contract on LNG supplies from the BP-managed Tangguh field in West Papua to China was signed in 2002 during the Megawati Soekarnoputri presidency.
The LNG price in the contract was recently found to be inordinately low. Based on the government's calculations, the price would lead to a potential loss of Rp750 trillion or some US$75 billion to the state.
The contract price was based on a formula using a crude oil price of only US$38 per barrel while the price of oil now had surpassed the level of US$110 per barrel.
Previously, an oil industry observer, Kurtubi, had said it would be better for the government to cancel the contract although Indonesia would then have to pay a penalty of US$300 million.
"But paying the penalty is better than the prospect of losing billions of rupiah over the next 25 years," he said.
