Construction of Tangguh likely to start soon<\/p>\n
Fabiola Desy Unidjaja, The Jakarta Post, Jakarta<\/p>\n
The long-delayed construction of the Tangguh LNG plant in Papua
\nmay well start soon, with contentious issues between the
\ngovernment and the BP-led consortium that manages and controls
\nthe gas fields finally being resolved.<\/p>\n
The government has extended BP's production sharing contracts
\nin the three blocks that supply Tangguh -- Berau, Muturi and
\nWiriagar -- until 2035. The contracts for the blocks were
\npreviously due to end in 2017, 2022 and 2023, respectively.<\/p>\n
\"The government has extended the contracts to 2035 and they
\ncan continue operations in the three gas blocks,\" ministry of
\nenergy and mineral resources director of natural gas Novian M.
\nThaib told The Jakarta Post on Tuesday.<\/p>\n
The extension was made official over the weekend, Novian said,
\nadding that the government and BP had also reached a settlement
\non other contentious issues, including agreement on the
\ngovernment's share of revenue that BP earns from the three blocks
\nthat will be increased from 60 percent to 62 percent.<\/p>\n
Another issue revolved around the so-called \"acts of
\ngovernments\" clause -- a precautionary measure to anticipate
\nunexpected disruptions to supply caused by government regulations
\nthat could lead to Tangguh's inability to fulfill gas supply
\ncommitments to buyers.<\/p>\n
Under the settlement, any penalty resulting from late delivery
\nof LNG shipments to any buyer would initially be paid by BP, but
\nwould later be reimbursed from Tangguh's revenues.<\/p>\n
\"Basically, in the contract extension we stipulated that the
\nproject will finance and operate itself,\" Novian emphasized.<\/p>\n
Previously, the consortium had asked for protection in
\nrelation to the implementation of special autonomy in Papuan
\nprovinces.<\/p>\n
Many companies have frequently complained about various bylaws
\nissued by provincial and other local administrations throughout
\nthe nation that put unreasonable burdens on business activity.<\/p>\n
The LNG plant is slated to start construction almost
\nimmediately and will be completed by 2008.<\/p>\n
Indonesia is hoping that the operation of the Tangguh field
\nwill make up for dwindling gas production from the fields in
\nBontang, East Kalimantan and Arun, Aceh.<\/p>\n
Tangguh has estimated gas reserves of 14.4 trillion cubic feet
\nand is expected to extract more than seven million tons per annum
\nin the first phase of production.<\/p>\n
Tangguh has so far secured deals to supply a combined 7.6
\nmillion tons of LNG worldwide; namely to U.S.-based Sempra
\nEnergy, South Korea's K-Power Co. and steel maker Posco, as well
\nas a plant in China's Fujian province.<\/p>\n
The BP-led consortium will cover some US$2 billion of the US$5
\nbillion estimated total cost of the project, with the balance
\ncoming from loans.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/construction-of-tangguh-likely-to-start-soon-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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