RI's Gas Revenue Will Increase Following Price Deal With China

Jakarta, July 1 (Antara) - Indonesia`s revenue from gas sector is set to increase as the country had renegotiated new sale price of Liquefied Natural Gas (LNG) with China, Coordinating Minister for the Economy Chairul Tanjung said here on Tuesday. "Renegotiation of gas price with China will give a significant increase of revenue to Indonesia," Chairul said. Meanwhile Energy and Mineral Resources Minister Jero Wacik said the new deal with China would increase revenue from gas sector from US$5.2 Billion to be US$20.8 Billion. He explained in 2002 Indonesia agreed to export LNG from its Tangguh trane I and II to Fujian, China, until the year of 2034 with the selling price of $2.40 per million British thermal unit (mmbtu). The price was agreed based on calculation of 525 percent times Japanese Crude Cocktail. However the selling price was considered as well below the market price. Hence in 2006 the contract was revised making the selling price of LNG to China to be $3.35 per mmbtu. "After another renegotiation following the meeting between President Susilo Bambang Yudhoyono and China`s President Hu Jintao, as of July 2014 the JCC price is adjusted according to the current market. If the JCC is at US$100 per barrel, then gas export to china will be at US$8 per mmbtu," said Jero. The minister added Indonesia would also renegotiate gas selling price with South Korea.