Indonesian Tangguh Project to Supply 15 LNG Cargoes to Arun Terminal in 2016

Indonesia’s Arun LNG import terminal will receive 15 LNG cargoes from the Tangguh project during 2016, country’s oil and gas regulator SKKMigas said August 31.

Seven cargos have already been supplied during the first half of the year, SKKMigas’ head of public relations Taslim Z. Yunus said adding that PT PLN (Persero) is the only recipient of LNG through Arun regasification facilities.

He said that the average price of Tangguh LNG supplied to Arun has been $4.9/mn Btu for the first six months of the year down from $6.74/mn Btu for the same period last year. "This price includes the costs of exploration, exploitation, LNG liquefaction, and transportation distances of up to 4,800 km," said Taslim.

In July, BP and its partners approved the final investment decision (FID) to expand Tangguh LNG by adding a third train (Train 3) and 3.8mn mt/yr of production capacity, bringing total plant capacity to 11.4 mn mt/yr. 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% 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. Arun was formerly an LNG export plant until Indonesia's demand for gas rose to the point it needed to go into reverse.

Shardul Sharma