1st Jul 2016 09:52
LONDON (Alliance News) - BP PLC Friday said it has made a final decision with its partners to expand the Tangguh liquefied natural gas facility in Indonesia which will increase the production capacity and involve drilling new wells, installing new platforms and building infrastructure.
The project holds six gas fields in the Wiriagar, Berau and Muturi production sharing contracts in Bintuni Bay within Papua Barat province and has offshore processing facilities supplying two liquefaction trains that have been in operation since 2009.
BP is the operator and holds a 37.16% stake in the project alongside its partners, MI Berau BV with 16.3%, CNOOC Muturi Ltd with 13.9%, Nippon Oil Exploration (Berau) Ltd with 12.23%, KG Berau Petroleum Ltd and KG Wiriagar Petroleum Ltd, which together hold 10%, Indonesia Natural Gas Resources Muturi Inc with 7.35% and Talisman Wiriagar Overseas Ltd with the other 3.06%.
"This final investment decision marks the culmination of many years of hard work by BP, our partners, and the Indonesian government. We are pleased to reach this major milestone and look forward to continued cooperation as we progress the largest upstream project in the eastern part of Indonesia," said Christina Verchere, regional president of BP's operations in the Asia Pacific.
The expansion will be significant, boosting capacity by about one third overall and creating 10,000 local jobs over the life of the project.
A third LNG train will be added and will have the same 3.8 million tonne capacity as each of the two existing LNG trains, pushing the total capacity at the project up to 11.4 million tonnes of LNG per year.
The expansion will also include two new offshore platforms being installed and 13 new wells being drilled, alongside an expansion of the LNG loading facility and the construction of supporting infrastructure.
"The Tangguh expansion project demonstrates BP and its partners' continued confidence in Indonesia and our commitment to work closely with the government to meet the country?s energy needs, while creating thousands of jobs,? said BP Chief Executive Bob Dudley.
BP is one of the largest foreign investors in Indonesia and has both exploratory and producing operations in the country, including Tangguh LNG which began operations in mid-2009. BP also has a downstream and petrochemical presence in the market through Castrol Indonesia and BP Petrochemical Indonesia.
The new train that is to be installed will mainly provide LNG to the Indonesian state electricity company, known as Persero, which will take over 2.8 million tonnes of LNG per year - equal to 75% of annual production from the new train.
The other 25% will be sold under contract to Kansai Electric Power Co in Japan, the other foundation buyer for the new train.
BP shares were trading up 1.3% to 444.0 pence per share on Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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