BP to Invest $10 Billion in Indonesian LNG, CBM

British Petroleum (BP) will invest $10 billion in Indonesia over the next decade to boost output at the Tangguh LNG project and expand into coal-bed methane in Kalimantan, according to Executive Director Bob Dudley.

BP plans to build a third LNG production line, or train, at Tangguh and possibly a fourth, Dudley told reporters after meeting Indonesia’s President Susilo Bambang Yudhoyono in Jakarta today.

BP, which has operated for more than 35 years in Indonesia, has invested $7 billion in the country to date, he said.  Indonesia’s push towards natural gas is to ease dependence on imports after output declined due to aging fields.

“Our focus in investment is Tangguh in Papua, which we know we handle with great care as that’s already a very large project for BP,” Dudley said. BP will submit a proposal to the Indonesian government in the next two months for the construction of the third train.

In Kalimantan, BP will develop CBM blocks on the Indonesian side of Borneo Island. In April BP signed four CBM production-sharing contracts in the Barito basin.

The Tangguh LNG plant in West Papua province currently has two trains with a combined production capacity of 7.6 million metric tons of LNG a year.

The $5 billion Tangguh project, which shipped its first LNG cargoes in 2009, has multi-year contracts to supply 2.6 million tons a year to China, 1.15 million tons a year to South Korea and an agreement to supply as much as 3.7 million tons a year to Sempra Energy, BP said.

Source: Bloomberg