Indonesia wants to as much as double the price for gas it sells from its Tangguh liquefied natural gas plant to China National Offshore Oil Corp’s (CNOOC) Fujian LNG terminal, oil and gas regulator BPMigas said on late Monday.

Tangguh LNG has a long-term contract to supply 2.6 million tonnes of LNG per year to CNOOC’s Fujian terminal at an average price of $3.35 per million British thermal units (mmBtu), well below the current spot rate of $16.50/mmBtu.

Indonesia is aiming to boost gas prices for Tangguh LNG to $5-$7/mmBtu, in negotiations with CNOOC that are set to start in mid-January, BPMigas operational director Rudi Rubiandini said.

Like most long-term Asian LNG contracts, Indonesian LNG contract prices are based on a formula linked to oil prices and Indonesia has been hoping for some time to renegotiate the formula for the gas it sells to China.

The Tangguh plant has other foreign supply contracts, including a 20-year deal to lift 3.6 million tonnes with U.S. firm Sempra Energy and contracts with South Korean firms K-Power and POSCO.

The Tangguh LNG plant, led by BP Plc , has the capacity to produce 7.6 million tonnes per year.

Source: Reuters