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.