BP Migas denies KOGAS discount deal

Despite reports to the contrary, Indonesia’s oil and gas marketing body, BP Migas, has denied it has offered Korea Gas Corp (KOGAS) a 40% discount to extend an LNG contact.

Speaking to the Jakarta Post BO Migas head Rachmat Sudibyo said, “[BP Migas has] yet to negotiate with [KOGAS]. KOGAS and the Indonesian LNG marketing team are yet to meet to negotiate the contract extension and the new LNG price.”

“Forty percent is a very huge discount. We will work to get a maximum price to ensure a profit for the state,” added Rachmat who declared the price he was looking for a price range of US$4.50-US$4.60 per mmbtu against a crude oil price of US$30 per barrel.

Under the terms of the current contract, which expires in 2007, KOGAS buys 2.3 million tons per annum from the Arun LNG plant in Aceh and BP Migas has admitted the South Korean firm was looking for a short-term, five to seven year contract to buy between 500,000 tons to 1 million tons of LNG per annum.

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