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Why Malaysia and Indonesia are so stupid to sign 25-year LNG contracts?

niko

They both regretted for signing 25-year LNG supply contract with China because some Middle East nations sell LNG at 15 USD per million BTU compared with 2.4 USD per million BTU paid to Indonesia (the actual price paid to Petronas also quite low, I do not have its exact figure).

One word, the officials from both countries are donkeys without horizontal view on LNG price in the international market. They were so glad to sign 25-year contract with China, and now they are crying like a baby to ask for price review unilaterally with China when the LNG price is risen up several times.

Sometimes China give in to their demand for diplomatic consideration because they have legal reason to reject any price revision once the price is fixed in the contract.

A former Indonesian minister summed it right, “Indonesia (Malaysia too) is a God-gifted resource-rich nation except her own people ruin the resources and nation.”

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