BP eyes Java market for Tangguh LNG<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
After securing the Fujian supply contract, Anglo-American energy
\nfirm BP Plc is eyeing other markets outside China, including
\nJava, to sell the liquefied natural gas (LNG) it plans to produce
\nat the Tangguh LNG plant in Papua.<\/p>\n
In the first phase of construction, BP and its consortium
\npartners plan to install two trains at the Tangguh plant, with a
\ncombined capacity of seven million tons per year.<\/p>\n
Under the contract signed on Thursday, China's Fujian province
\nwill only buy 2.6 million tons per year from the plant.<\/p>\n
Philippine energy firm GNPower has signed a letter of intent
\nto buy another 1.5 million tons per year.<\/p>\n
Consequently, the plant still has an excess capacity of 2.9
\nmillion tons per year.<\/p>\n
BP Indonesia president Bill Schrader said the company was
\nseeking buyers for the excess capacity in India, Korea, Japan,
\nthe West Coast of the U.S and Java.<\/p>\n
\"It makes a lot of sense to sell LNG to Java. Although it has
\na lot of gas surrounding it, Java still has a high demand for
\ngas,\" Schrader told The Jakarta Post in a special interview,
\nadding that state electricity company PT PLN had indicated an
\ninterest to buy LNG for its power plants on the island.<\/p>\n
Schrader said BP was giving consideration to building a
\nfloating LNG deliquefaction terminal to supply gas to customers
\nin West Java, which is the country's primary industrial hub.
\nDeliquefaction is the process of converting LNG to gas.<\/p>\n
The potential of the West Java market has also been
\nacknowledged by state gas transmission and distribution company
\nPT Perusahaan Gas Negara (PGN). The state company has, for years,
\nbeen planning to build a 900-kilometer pipeline from South
\nSumatra across the Sunda strait to West Java to carry gas from
\ngas-rich South Sumatra to the industrial region. But it has thus
\nfar been unable to raise funds for the project.<\/p>\n
PGN has said the project would cost $900 million.<\/p>\n
PGN has even planned to build a pipeline worth $1.7 billion to
\nsupply gas from East Kalimantan to East Java.<\/p>\n
Schrader refuted arguments that the planned LNG deliquefaction
\nterminal offshore from West Java would be in conflict with PGN's
\npipeline development plan, saying instead that both facilities
\ncould complement each other to supply gas to the province.<\/p>\n
He maintained, however, the cost of building an LNG-receiving
\nterminal in West Java, plus the transportation cost from Papua to
\nJava, was lower than the cost that would be incurred by PGN for
\nthe development of the South Sumatra-West Java pipeline.<\/p>\n
The cost for the development of an LNG-receiving terminal was
\n$300 million, according to Schrader.<\/p>\n
Schrader claimed that BP and state-owned oil and research
\ncenter Lemigas had once produced a study that concluded that it
\nwas economically feasible to sell LNG in Java.<\/p>\n
The Tangguh LNG plant is located at Berau Bintuni Bay, which
\ncontains 14.4 trillion cubic feet of proven gas reserves. BP has
\n50 percent of the reserves, with the balance shared by Mitsubishi
\n(16 percent), Nippon Oil Exploration (12 percent), British Gas
\n(11 percent), Kanematsu Corp. (10 percent) and LNG Japan (1
\npercent).<\/p>\n
Chinese state-owned firm China National Offshore Oil
\nCorporation (CNOOC), which acts as the buyer in the Fujian LNG
\nsupply contract, will take a 12.5 percent stake in the gas
\nfields.<\/p>\n
The Fujian contract will generate a total of $8.5 billion in
\nsales revenue to the government throughout the contract period of
\n25 years, while the two trains, if running at full capacity, will
\ngenerate $21 billion in revenue.<\/p>\n
Initially, BP and its partners had planned to install four
\ntrains at the Tangguh plant, which will generate $45 billion in
\nrevenue.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bp-eyes-java-market-for-tangguh-lng-1447893297",
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"sponsor": "Okusi Associates",
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