BP-Led Tangguh LNG project aims for early start to deliveries
BP-Led Tangguh LNG project aims for early start to deliveries
Angela Macdonald-Smith, Bloomberg/Sydney
BP Plc and its partners in the A$6 billion liquefied natural gas project in Indonesia plan to begin production earlier than estimated, said Ngurah Kresnawan, deputy vice president of the venture.
The Tangguh venture is working to "ensure LNG can be delivered on schedule, and hopefully ahead of schedule," Kresnawan said in Darwin, Australia today, without giving a specific date. The project, 37 percent owned by BP, is due to start production in 2008.
Tangguh, which Mitsubishi Corp., CNOOC Ltd. and Inpex Corp. hold stakes in, has contracts to supply LNG to China's Fujian terminal, to buyers in South Korea and to a terminal being built on the western Mexican coast by Sempra Energy.
The plant in Indonesia's easternmost province of Papua will initially have two LNG production lines, or trains, with a combined capacity of 7.6 million metric tons a year. BP and its partners are seeking more customers to justify an expansion of the plant, Kresnawan said.
"The expansion phase is part of the design that we already have," Kresnawan said at the South East Asia Australia Offshore Conference. The expansion "will pretty much be driven by when the additional markets are secured. I hope it's going to be as soon as possible."
A group including Nippon Oil Corp., Sumitomo Corp., Sojitz Holdings Corp., Japan National Oil Corp., Kanematsu Corp. and Mitsui & Co.'s Overseas Petroleum Corp. unit also own stakes in Tangguh.
"We hope the first drop of LNG from Tangguh will be some time in the year 2008, hopefully in the year of 2007," Indonesia's Energy Minister Purnomo Yusgiantoro, said at a welcome reception for the conference on June 5.
The Indonesian government is considering developing LNG projects near the Donggi and Masela areas in Sulawesi, he said.
The Indonesian government expects three main buyers to emerge for the Tangguh venture that may support an expansion. They are Japan, the domestic Indonesian market that includes two terminals proposed on Java island, and the local Tangguh region for a fertilizer or petrochemicals plant, Purnomo said.
The start-up of Tangguh will help boost Indonesia's LNG production, which has fallen because of lower output at PT Arun NGL, he said.
Arun in Sumatra is the smaller of the two existing LNG plants in Indonesia. The bigger plant, PT Badak NGL, is located in Kalimantan on the Indonesian part of Borneo island.
Work on expanding the Tangguh project also hinges on talks with the Indonesian government about whether gas should be exported or supplied to the domestic market, Kresnawan said.
The venture is still working to convert an initial agreement to sell 1 million tons a year of LNG to the Philippines into a sales agreement, he said.