BP to Invest $12b in West Papua LNG
London-based energy giant BP plans to invest $12 billion for the development of the Tangguh liquefied natural gas project in West Papua, an official at the state oil and gas upstream regulator says.
“BP executives had stated their intention during the visit of Jero Wacik, the energy and mineral resources minister, to England recently,” I Gde Pradnyana, the deputy of operation control at BPMigas, said on Thursday.
He said construction of the plant, which will have the capacity to produce 3.8 million tons per year, will begin next year and is scheduled for completion in 2017.
The Tangguh refinery currently has two trains — units that purify and liquefy natural gas — producing a total of 7.6 million tons per year.
BP controls a 37.16 percent share of the enterprise and is the principal operator of the project, which involves the tapping of six gas fields with proven reserves of 14.4 trillion cubic feet.
BP initially planned to build just the third LNG train in the project but then decided to include the development of the Bintuni Bay area, which is where the $5 billion project is located.
“The development of Bintuni Bay is a local aspiration that we pushed forward in the negotiations,” Gde said.
He said BPMigas was waiting for BP to submit a revision to its original plan of development for the project, which should occur within weeks.
“If BP can submit the plan this month, we will expedite the procedure so the permit can be issued in September,” he added.
Gde said although BPMigas is concentrating its efforts on securing investments from large oil and gas companies with advanced technologies and in strong financial positions, eager investors must play by the book and provide a guarantee.
“Indonesia does need foreign investors, but they must abide by the country’s pro-job, pro-poor, pro-growth and pro-environment policies,” he added.
LNG from Tangguh is delivered to China’s Fujian LNG project, South Korea’s Korea’s K-Power and Posco, and Mexico’s Sempra Energy. BP will also supply 230 million cubic feet of gas per day (mmsfcd) to state utility Perusahaan Listrik Negara beginning next year.
The Energy and Mineral Resources Ministry expects to produce an average of 5,118 mmscfd of natural gas annually, from this year until 2020, drawing from 17 gas fields that are now, or have yet to be placed in operation.