BP, Partners Approve FID on Tangguh Expansion: UPDATE

(Adds details of cost in second paragraph)

BP and its partners have approved the final investment decision (FDI) pertaining to expansion of Tangguh LNG project in Indonesia, it said in a statement July 1.

The expansion project will add a third LNG process train (Train 3) and 3.8 million tonne per annum (mtpa) of production capacity to the existing facility, bringing total plant capacity to 11.4 mtpa. The project also includes two offshore platforms, 13 new production wells, an expanded LNG loading facility, and supporting infrastructure, BP said. Sources said that with falling costs in the industry the project was now put at the lower end of the $8bn-$10bn range.

BP said about 75 percent of the Train 3 annual LNG production has been sold to the Indonesian state electricity company PT. PLN (Persero). The remaining volumes are under contract to Kansai Electric Power Company in Japan, the other foundation buyer for Train 3.

This FID decision follows the Government of Indonesia’s approval of the Plan of Development II in late 2012. Awards for the project’s key engineering, procurement and construction (EPC) contracts are expected in the third quarter of 2016 with construction to begin thereafter. Operation is expected in 2020.

The Tangguh LNG facility is located in Teluk Bintuni Regency, Papua Barat province of Indonesia and consists of offshore gas production facilities supplying two 3.8 mtpa liquefaction trains that have been in operation since 2009. It is operated by BP Berau Ltd on behalf of the other production sharing contract partners as contractor to SKK Migas. BP Berau Ltd and its affiliates in Indonesia hold a 37.16 percent interest in the project. Other Tangguh production sharing contract partners are MI Berau B.V. (16.30 percent), CNOOC Muturi Ltd. (13.90 percent), Nippon Oil Exploration (Berau), Ltd. (12.23 percent), KG Berau Petroleum Ltd and KG Wiriagar Petroleum Ltd (10 percent), Indonesia Natural Gas Resources Muturi Inc. (7.35 percent), and Talisman Wiriagar Overseas Ltd. (3.06 percent).

Newsdesk