Tangguh plant secures 7 vessels to ship LNG

Leony Aurora, The Jakarta Post, Jakarta

A BP Plc.-led consortium has named three consortia as winners in a tender to provide seven vessels to ship liquefied natural gas (LNG) from Tangguh plant in Papua to customers in Korea and Mexico.

The tender results were announced last month and the winners were the consortia of Japan's K-Line with PT Pelayaran Meratus, Nippon Yusen Kaisha (NYK) with PT Samudera Shipping Services and Sovcomflot, and U.S.' Teekay Shipping with PT Fast Marine Services.

"The shipping companies advise that all of the vessels will be manufactured in Korea," executive vice president Tangguh development Budiman Parhusip said in an e-mailed statement on Wednesday.

"The LNG vessels are expected to be delivered to the Tangguh LNG project in Papua, Indonesia, beginning in the fourth quarter of 2008," he added.

K-line consortium will provide three LNG carriers, which will be built by Samsung Heavy Industries, with a capacity of 153,000 cubic meters each.

NYK consortium will supply two 145,000-cubic-meter carriers to be built by Daewoo Ship Building and Marine Engineering and Teekay consortium two 155,000-cubic-meter vessels by Hyundai Heavy Industries.

Six of the carriers will be used to transport LNG of up to 3.7 million tons a year to Sempra Energy on the west coast of Mexico while the other one will serve commitments amounting a total of 1.35 million tons of LNG in a year to South Korea's K-Power Co. and steelmaker Posco.

British energy giant BP leads the consortium that manages the long awaited Tangguh LNG venture, which is estimated to cost US$5 billion.

Indonesia is pinning its high hopes on Tangguh, the country's third LNG plant, to make up production of two other plants in Arun, Aceh and Bontang, East Kalimantan, which are on decline due in part to aging fields.

Located in Berau-Bintuni region in Papua, the Tangguh plant is expected to produce 7 million tons per annum in the first phase of production scheduled in 2008.

Gas fields, which will feed the plant, have certified reserves of 14.4 trillion cubic feet (TCF).

BP has so far secured deals to supply a combined 7.6 million tons of LNG worldwide, including to Sempra, K-Power, Posco, and the Fujian terminal in China.

Shipping services to China will be provided by the purchasers, CNOOC and Fujian Investment & Development Co., Ltd., said Budiman.