RI to raise LNG price for S. Korea

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)