BP announces FID to expand Tangguh LNG facility

BP, on behalf of its project partners, has announced that the final investment decision (FID) has been approved for the development of the Tangguh Expansion Project in the Papua Barat Province of Indonesia.

The project will add a third LNG process train (Train 3) and some 3.8mn t/y of production capacity to the existing facility, bringing total plant capacity to 11.4 mn t/y. It also includes two offshore platforms, 13 new production wells, an expanded LNG loading facility and supporting infrastructure.

The project will play an important role in supporting Indonesia’s growing energy demand, with 75% of the Train 3 annual LNG production 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.

In addition, the project will support the economic growth of Indonesia and the Papua Barat Province, providing 10,000 jobs spread over the project period.Tangguh is currently making positive local social and economic impacts through its comprehensive community development programmes and providing much needed electricity for the Teluk Bintuni Regency. Train 3 will enhance this with a portion of the gas committed for the electrification of Papua Barat, and further development of Tangguh’s Papuan workforce to meet the 85% Papuan skilled workforce commitment by 2029.

The 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 3.8mn t/y liquefaction trains that have been in operation since 2009. It is operated by BP Berau on behalf of the other production sharing contract partners as contractor to SKK Migas. BP Berau and its affiliates in Indonesia hold a 37.16% interest in the project. Other Tangguh production sharing contract partners are MI Berau BV (16.3%), CNOOC Muturi (13.9%), Nippon Oil Exploration (Berau),  (12.23%), KG Berau Petroleum and KG Wiriagar Petroleum (10%), Indonesia Natural Gas Resources Muturi (7.35%), and Talisman Wiriagar Overseas (3.06%).