Tangguh LNG plant to get financing

Tangguh LNG plant to get financing

JAKARTA: A consortium led by BP PLC will receive a US$3.5 billion 10-year loan in October or November to help finance the construction of a natural gas liquefaction plant in Papua, a government official said.

A consortium of Chinese banks led by state-owned Bank of China will provide $1.2 billion and a consortium consisting of the Japan Bank for International Cooperation (JBIC) and the Asian Development Bank (ADB) will provide the remaining $2.3 billion, Kardaya Warnika, chairman of the Oil and Gas Upstream Regulatory Body (BP Migas), said on late Wednesday.

Kardaya did not provide the interest rate to be charged on the loan.

The consortium is pushing ahead with the $6 billion project to build the Tangguh LNG plant comprising two production trains. The plant is expected to have a capacity of 7.6 million metric tons a year, with commercial production set to begin in late 2008.

It is unclear how BP and its partners will raise the other $2.5 billion.

BP and its partners have agreed to supply 2.6 million tons of LNG a year from the Tangguh plant to China, 1.35 million tons a year to South Korea and 3.7 million tons a year to Mexico. -- Dow Jones