Tangguh to start construction in January<\/p>\n
The Jakarta Post\/Jakarta<\/p>\n
British energy giant BP Plc. and its partners will start the
\nconstruction of the Tangguh liquefied natural gas (LNG) plant in
\nPapua in January next year, according to an official.<\/p>\n
Rachmat Sudibyo, head of the country's oil and gas regulatory
\nimplementing body (BP Migas), said on Friday that if necessary,
\nBP would provide the required funds in the early stages of the
\nconstruction before banks disbursed loans for project.<\/p>\n
"It will finance the construction by its own cash before the
\ndisbursement of the loan so it can start (construction) in
\nJanuary," said Rachmat Sudibyo.<\/p>\n
BP and its partners are now completing the loan agreement with
\nforeign banks including the Japan Bank of International
\nCooperation (JBIC), Rachmat said.<\/p>\n
The construction was originally planned for the end of last
\nyear, but had to be delayed a couple of times as preparations
\ntook longer than expected.<\/p>\n
The project is estimated to cost about US$5 billion, of which
\nBP and partners will cover $2 billion with the remaining $3
\nbillion expected to come from lenders.<\/p>\n
The plant is expected to produce between seven to eight
\nmillion tons of LNG per annum in the first phase of production.<\/p>\n
Located in the Berau-Bintuni region, the gas field has
\ncertified reserves of 14.4 trillion cubic feet (TCF), in which BP
\n-- along with other foreign partners -- has signed a 20-year
\ncontract as a partner of BP Migas to exploit.<\/p>\n
BP holds a 37.16 percent stake in the project in partnership
\nwith MI Berau BV (16.30 percent), CNOOC Ltd (16.96 percent),
\nNippon Oil Exploration Berau (12.23 percent), KG Companies (10.0
\npercent) and LNG Japan Corporation (7.35 percent).<\/p>\n
BP has so far secured deals to supply a combined 7.6 million
\ntons of LNG worldwide, including to San Diego-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
Last year, BP named Halliburton Co.'s Kellog Brown & Root unit
\nto build Tangguh.<\/p>\n
Indonesia, which has abundant reserves of gas, was one of the
\nworld's top LNG producers but has been struggling lately amid the
\nincreasingly competitive market.<\/p>\n
Last year, Indonesia exported 26.5 million tons of LNG, the
\nbulk of which went to Japan (68 percent), followed by South Korea
\n(19 percent) and Taiwan (13 percent).<\/p>\n
Aside from Tangguh, Indonesia has two other LNG plants,
\nlocated in Arun, Aceh, and in Bontang, East Kalimantan.<\/p>",
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"sponsor": "Okusi Associates",
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