BP-led consortium makes progress in Tangguh project

BP-led consortium makes progress in Tangguh project

The Jakarta Post, Jakarta

Concern about the treatment of directly affected villages, local
procurements and the employment of Papuans continue to surround
the development of the massive Tangguh project in Papua.

Despite these issues, the BP-led consortium has shown
impressive progress in its project development, Senator George
Mitchell, a member of the Tangguh Independent Advisory Panel
(TIAP) said recently.

"The visit confirms to us the enormous potential benefit to
the people of Bintuni, Papua, and Indonesia in general if the
project meets its full potential," said the former U.S. senator.

The team -- comprising Mitchell, former Indonesian Ambassador
to Australia Sabam Siagian, Lord Hannay and the Rev. Herman Saud
-- has recently completed its annual visit to the project and
spoke to stakeholders in the province.

The Tangguh project is located in Bintuni Bay area, while the
gas fields are located in the bay and the liquefied natural gas
(LNG) plant complex is being built on the south shores of the
former Tanah Merah village.

Villagers in the north shore feel that the early benefits of
the project are being disproportionally given to the south shore.
BP has responded by developing clean water, school and health
care projects, Mitchell said.

Although BP has met the requirement that 30 percent of the
goods procured should be made domestically, locals want more to
be purchased from their areas.

"These will be continuing efforts that will go on through the
process of construction and the operation plan that BP and the
government will have to manage and work at and continue to do,"
Mitchell said.

The team will complete a comprehensive report, which will
include recommendations for BP and its partners, early next year.

The project -- the country's third LNG plant -- is estimated
to cost up to US$5.5 billion, including the construction of the
LNG plant and other infrastructure. The construction of the
complex commenced this year and the plant is expected to start
production in 2008.

The plant is estimated to produce more than 7 million tons of
LNG per annum in the first phase of production. The government
expects the plant to offset the declining production at existing
plants in Bontang, East Kalimantan; and Arun, Aceh, which have
been operating for more than 20 years.

The fields in Bintuni Bay that will feed Tangguh have
certified reserves of 14.4 trillion cubic feet.