12:26 pm Jan 17, 2014, By Tito Summa Siahaan
William Lin, the regional president for BP’s Asia-Pacific operation, said the Tangguh liquefied natural gas expansion project in West Papua is moving ahead as planned.
He said the company would soon announce the winner of a $5 billion contract for Tangguh’s onshore Front-End Engineering Design.
“We hope to do that by the end of this quarter,” Lin added.
The project is estimated to cost approximately $12 billion, making it one of the largest upstream oil and gas projects in Indonesia in the past decade.
The final investment decision for the project will be made in 2015 and the first LNG shipment is scheduled for 2019 as previously planned, Lin said.
Based on the project proposal, BP plans to build a third train — a facility that turns natural gas into liquid — with a capacity of 3.8 million tons a year at the site.
Currently, there are two trains in operation producing around 7.6 million tons of LNG a year.
BP owns a 37.16 percent interest in the project and is the operator.
The Tangguh LNG project is located in Bintuni Bay in Papua, in the eastern-most part of Indonesia.
The Tangguh LNG operation is related to exploitation activities in several natural gas fields with combined reserves of 14.4 trillion cubic feet.
The project is expected to draw the much-needed investment to the underdeveloped Papua island.
With a steady supply of energy in the form of natural gas almost guaranteed, the government planned to develop a $7 billion petrochemical complex in Bintuni Bay, which is located near the project.
South Korea’s LG International and state-owned fertilizer producer are among the companies planning to invest in the Bintuni Bay project, but have yet to secure any assurance on gas supplies from the government.
The development would need at least 180 million metric standard cubic feet a day.
Tangguh is one the LNG projects in Indonesia. The other projects are Badak LNG in Bontang, Kalimantan, and Donggi Senoro on Sulawesi island.
Donggi Senoro Liquified Natural Gas (DSLNG) is 59.9 percent owned by Sulawesi LNG, a company jointly owned by Japan’s Mitsubishi Corporation and South Korea’s Kogas.
Pertamina Hulu Energi, a unit of state energy company Pertamina, holds a 29 percent stake in DSLNG.
The remainder is owned by Medco LNG Indonesia, a unit Medco Energi Internasional.
Also on The Jakarta Post:
Tangguh LNG set for $12b expansion
Raras Cahyafitri, The Jakarta Post, Sorong, West Papua | Business | Wed, December 18 2013, 12:22 PM
Tangguh LNG, an integrated liquefied natural gas (LNG) operation in the country, is expecting to kick off a US$12 billion expansion project pending the results of a tender to be announced early next year.
Tantri Yuliandini, a senior communication officer with BP Indonesia, which operates the Tangguh block in West Papua, said the company was in the process of evaluating the tender that closed September.
“We are expecting to announce the results in the first quarter of 2014,” Tantri said Tuesday.
The expansion project involves a plan to boost Tangguh LNG’s capacity by 3.8 million tons per year.
Tangguh’s capacity is currently 7.6 million tons and is expected to reach 11.4 when the expansion project is completed in 2019.
Tantri said the Tangguh expansion would have its final investment approved next year. The expansion was approved by the government in November 2012.
BP currently operates Tangguh LNG in Papua. The company holds 37.16 percent stake in the gas field project, along with MI Berau BV with 16.3 percent; CNOOC Muturi Ltd. with 13.9 percent; Nippon Oil Exploration (Berau) Ltd. with 12.23 percent; KG Berau/KG Wiriagar with 10 percent; Indonesia Natural Gas Resources Muturi Inc. with 7.35 percent; and Talisman Wiriagar Overseas Ltd. with 3.06 percent.
With the expansion project, Tangguh will have a new LNG facility called Train 3, which will complement Train 1 and Train 2.
It is estimated that the expansion project will require $12 billion in investment.
Once the expansion is completed and operational, Tantri said, Tangguh will be committed to the distribution of 40 percent of the LNG produced by Train 3 to the domestic market.
Moreover, the company also plans to supply up to 15 million cubic feet per day (mmscfd) of gas to a power plant operated by state-owned electricity company PT PLN when the Train 3 project is finished.
Tangguh signed a supply and offtake agreement (SOA) Thursday to supply state electricity company PLN with 4 megawatts (MW) of electricity to be sold and distributed to the residential communities of Teluk Bintuni regency in West Papua.
The SOA was signed following a memorandum of understanding (MoU) that was inked in May 2012.
Under the agreement, electricity supply for the areas surrounding the Tangguh LNG plant in Teluk Bintuni will last 20 years.
BP regional president Asia Pacific William Lin said that a study to increase the supply by another 4 megawatt is under way.
Since becoming operational in 2009, Tangguh has delivered 407 cargoes of LNG to date.
Tangguh has delivered 109 cargoes from earlier this year up to Dec. 15, already higher than the number of deliveries in 2012, which was 103 cargoes.
TRAIN-3 DEVELOPMENT FOR THE EXPANSION OF TANGGUH LNG PROJECT IN EASTERN INDONESIA
Update: Feb 6, 2014 by mande
The Tangguh gas field lies in Bintuni Bay, in the province of West Papua, Indonesia. The natural gas field contains over 500 billion m³ (17 Tcf) of proven natural gas reserves, with estimates of potential reserves reaching over 800 billion cubic metres (28 trillion cubic feet).
The Tangguh field is developed by a consortium of international companies i.e. BP, CNOOC, Mitsubishi Corporation, and partners.
Production began in June 2009.
An LNG train is a liquefied natural gas plant’s liquefaction and purification facility.
In order to make it practical and commercially viable to transport natural gas from one country to another, its volume has to be greatly reduced. To obtain maximum volume reduction, the gas has to be liquefied (condensed) by refrigeration to less than -161 °C (the boiling point of methane at atmospheric pressure). This process also requires very strict safety measures and precautions during all liquefaction stages, due to the flammable nature of the gas involved.
Since the numerous impurities that are naturally found in the raw gas freeze at low temperatures, and would thus block the cryogenic section of the plant, the gas has to be purified before it can be cooled down to cryogenic temperatures
Train 3 – Tangguh Project
- The refinery operator is BP Indonesia.
- In early September 2012, on behalf of the Tangguh project partners, BP submitted the Plan of Further Development (POFD) of a third LNG liquefaction train (Train 3) for the expansion of the BP-operated Tangguh liquefied natural gas (LNG) project in Papua Barat province in eastern Indonesia.
- Approval of the plan was announced on November 12, 2012 by UK Prime Minister David Cameron in London after a bilateral meeting with Indonesia’s President Susilo Bambang Yudhoyono, attended by BP Group Chief Executive, Bob Dudley, and BP Regional President Asia Pacific, William Lin.
- BP is now completing the front end engineering design (FEED).
- BP will announce the winner contractor of the project at the end I/2014 quarter.
- Procurement refinery construction started early or mid-2015.
- Commissioning operations for the new train to begin in late 2018.
- Train 3 is expected to be on stream in 2019.
Train 3 by Tangguh project partners :
Based on news by pennenergy.com on November 12, 2012, the total investment in Train 3 by Tangguh project partners is estimated to be up to US$12 billion (£7.5 billion). Based on updated news by Bisnis Indonesia on 16/01/2014, Train 3 development plan worth U.S. $ 5 billion.
Tangguh is operated by BP Indonesia as contractor to Indonesia’s oil and gas regulatory body SKK MIGAS.
- BP holds a 37.16% interest in the project.
Other Tangguh contract partners are,
- Ml Berau BV (16.3%),
- CNOOC Ltd. ( 13.9% ),
- Nippon Oil Exploration (Berau), Ltd. (12.23%),
- KG Berau / KG Wiriagar ( 10%),
- LNG Japan Corporation ( 7.35% ), and
- Talisman ( 3.06%).
Tangguh Profile :
- Production Train 1 & 2 is 7.6 tons / year.
- Train 3 production capacity is estimated at 3.8 million tons / year.
- When the Train 3 is completed, the total LNG production will increase to be 11.4 million tons per year.
Under the terms of the plan, BP and its partners have agreed to sell and supply 40 per cent of the LNG output from Train 3 to Indonesia’s state electricity company PT.PLN (Persero) for the Indonesian domestic market.
Picture -1 : BP-operated Tangguh LNG in Bintuni Bay of Papua Barat (Picture Courtesy of BP Indonesia)
- “BP in Indonesia” , (http://www.bp.com/)
- “Proyek Train III tangguh – Kontraktor dirilis kuartal I/2014″, Bisnis Indonesia, page 7, 16-jan-2014.
- “LNG train“, (http://en.wikipedia.org/)
- “Tangguh gas field” , (http://en.wikipedia.org/)
- “Indonesian approves further expansion of Tangguh LNG” , (http://www.pennenergy.com/)