BP to develop Tangguh project in time for Fujian sale

BP to develop Tangguh project in time for Fujian sale

Dow Jones, Singapore

BP PLC will complete development of the greenfield Tangguh
liquefied natural gas project in West Papua, Indonesia, in time
to meet its first LNG sale to southern China's Fujian province by
2007, a company spokesman said Monday.

The "project will come onstream by 2007," in time to meet the
Fujian LNG sale contract, which calls for the first LNG delivery
in 2007, John O'Reilly said in response to a question by Dow
Jones Newswires.

The 2007 project completion date is one year later than 2006
reported previously.

But O'Reilly stressed that it had been the plan for BP to
bring the project onstream in 2007 when Indonesia announced the
Fujian win in September last year.

Prior to the awarding of the Fujian contract, the Tangguh
project was tipped to win a bigger US$13 billion LNG supply deal
to Guangdong province. The latter was awarded instead to
Australia, while Indonesia had to settle for the $8.5 billion
deal.

Under the deal, BP will deliver 2.5 million metric tons of LNG
to Fujian starting in 2007. The Tangguh project, when developed,
is capable of producing up to 7 million tons of LNG annually,
more than its sale commitment so far.

BP and its Indonesian partner, state-owned oil and gas company
Pertamina, are aggressively marketing Tangguh gas to Japan so
that the development of the LNG project, worth over US$2 billion,
can become economically viable.

"Actual construction on (the) site of Tangguh will begin next
year," said O'Reilly of the LNG project.

"Thereafter, it takes about three years (for the project to be
completed)," he added.

Besides BP and Pertamina, CNOOC Ltd., a unit of China National
Offshore Oil Corp., holds stakes in the Tangguh LNG project.