RI to raise LNG price for S. Korea

SEOUL (JP): Indonesia wants to increase the price of its liquid natural gas (LNG) exported to South Korea by 25 U.S. cents per million British thermal units (BTU), an executive of the Korea Indonesia Petroleum Co. Ltd. (Kipco) says.

"Negotiations between the two parties are still going on. A final meeting will be held in Jakarta in May," Kipco's director and chief representative, Dicky D. Soemiatno, said here Saturday.

Kipco, set up in 1988, is 45 percent owned by Indonesia's state-owned oil company Pertamina, 45 percent by Korea Development Company and seven percent by Sam Yong of Korea. It is assigned to manage Korea's oil purchases from Indonesia.

Soemiatno, who is Pertamina's representative at Kipco, said that Baharuddin, a Pertamina director, was visiting to meet with executives of the Korea Gas Corporation about the planned price increase.

Korea Gas Corporation is buying two million tons of LNG from Pertamina under a long-tern contract.

"The discussion, however, has not finished as Korea thinks that the new price is higher than the price offered by Qatar," Soemiatno said.

He said that Korea has recently signed a letter of interest with Qatar for the purchase of LNG at a cheaper price than Indonesia's.

"I think Korea should consider that shipment costs from Indonesia will be cheaper than Qatar," he said.

Indonesia was the only LNG supplier to South Korea before Malaysia entered the market last year. Indonesia and Malaysia agreed not to compete, he said

Indonesia would like to rise its gas prices to offset the drop in the price of oil. (icn)