Petronas Wants Higher Price for LNG it Sells to Kogas

Petronas, which sells two million tonnes of LNG to Kogas every year, wants higher price for the fuel from the Korean firm, sources have told news agency Reuters.

According to the news agency, the Petronas contract is one of several that Kogas is currently renegotiating, and a settlement could pave the way for a sharp jump in long-term LNG prices from Malaysia to South Korea.

"We would be happy if we could get above 13 percent of crude oil," one Petronas source directly involved with the negotiations told Reuters.

A second Petronas source told Reuters the Malaysian state-run company is aiming to renegotiate its contract with Kogas to 13 to 13.5 percent of crude oil prices, and that the current pricing formula is below 10 percent of crude oil prices.

Some industry insiders estimate that long-term LNG prices from Malaysia to South Korea could jump by as much as a third due to the renegotiations.

Petronas' 20-year supply contract with Kogas began in 2008 and prices can be reviewed every five to eight years.

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