Indonesia Expects Higher Price From China for Tangguh Gas

Indonesia’s oil and gas regulator BPMigas expects China to pay $5-7 per MMBTU for liquefied natural gas (LNG) supplied from Tangguh LNG in Papua.

Rudi Rubiandini, deputy operational control of BPMigas, said LNG export price to Fujian, China should be higher than average domestic gas price of $5 per MMBTU.

He said that domestic price of gas will likely rise to $7 per MMBTU and hopes to see Tangguh LNG gas price to China between $5 and $7 per MMBTU.

The current LNG export price to China is based on a ceiling price of Japan Crude Cocktail (JCC), which was set at $38 per barrel or $3.35 per MMBTU. This is higher than initial price of $2.4 per MMBTU used in contract signed in 2002 when JCC was set at $24 per barrel.