Tangguh LNG partners reach FID for expansion in Indonesia

Partners in the Tangguh production-sharing contract have taken a final investment decision (FID) for development of the Tangguh LNG expansion project in the Papua Barat province of Indonesia.

The BP PLC-led project will add a third LNG train, which will add 3.8 million tonnes/year of production capacity to the existing facility, bringing total plant capacity to 11.4 million tpy. The project also includes two offshore platforms, 13 production wells, an expanded LNG loading facility, and supporting systems.

This FID follows Indonesia’s approval of the Plan of Development II in late 2012, and environmental and social impact assessment in 2014 (OGJ Online, Nov. 5, 2012; Aug. 4, 2014). Front-end engineering and design contracts were let to two consortia in 2014 (OGJ Online, Oct. 22, 2014).

Awards for the project’s key engineering, procurement, and construction contracts are expected in the third quarter with construction to begin thereafter. Operation is expected in 2020.

BP notes that 75% of Train 3’s 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 Co. in Japan, the other foundation buyer for Train 3.

The Tangguh LNG project is operated by BP Berau Ltd. on behalf of the other PSC partners as contractor to SKK Migas. BP Berau and its affiliates in Indonesia hold 37.16% interest.

Other Tangguh PSC partners are MI Berau BV 16.3%, CNOOC Muturi Ltd. 13.9%, Nippon Oil Exploration (Berau) Ltd. 12.23%, KG Berau Petroleum Ltd. and KG Wiriagar Petroleum Ltd. 10%, Indonesia Natural Gas Resources Muturi Inc. 7.35%, and Talisman Wiriagar Overseas Ltd. 3.06%.