Indonesia to Sell Liquefied Natural Gas to Japan at Higher Price

The Indonesian government is currently negotiation a new deal on liquefied natural gas (LNG) sales to Japan to extend the existing contract and get a higher price, local press said Thursday.

Indonesia frequently delivers LNG cargoes to Japan holding an average of 1 million tons, which is valued at 8 U.S. dollars per mmbtu (million metric British thermal units).

This contract expires in 2010, The Jakarta Post reported.

In the negotiations, the government proposed a price of more than 10 dollars per mmbtu and agreement to export 3 million tons of LNG within a period of five years and another 2 million tons in a five-year term after 2015, the daily said, quoting remarks from energy and Mineral Resources Minister Purnomo Yusgiantoro.

The new contract will replace the existing 25-year contract, which binds the government to supply 12 million tons of LNG every year to Japan at the price of around 8 to 9 dollars per mmbtu until 2010.