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The Tangguh LNG project. Image courtesy of BP.

The Indonesian Ministry of Environment gave BP its first go-ahead Monday for a US$12 billion expansion at the Tangguh LNG project.

Tangguh LNG, located in the Papua Barat province, is the third largest liquefied natural gas supply facility in Indonesia and the first fully combined upstream and downstream LNG operation in the country.

The project is currently comprised of two identical LNG trains with production a capacity of 7.6 million tons per annum (mtpa).

Tangguh Expansion Project will add a third LNG processing train on the established operations, bringing total project capacity to 11.4 mtpa.

The expansion project will help meet the growing energy demand in Indonesia, BP said Monday.

As part of the expansion, BP and its partners will supply 40 percent of the LNG output from the third train, about 1.5 mtpa, to Indonesia’s state-owned electricity company PT. PLN for domestic use.

Other key required government approvals are still in process.

BP Berau operates Tangguh as a contractor to Indonesia’s government-run Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas).

BP holds a 37.16 percent interest in the project.

Indonesia-based MI Berau B.V. holds a 16.30 percent stake, China-based CNOOC Muturi Ltd. has a 13.90 percent stake and Malaysia-based Nippon Oil Exploration has a 12.23 percent stake.

Indonesia-based KG Berau/KG Wiriagar holds a 10 percent stake in the project, Indonesia Natural Gas Resources Muturi has a 7.35 percent stake and Canadian-based Talisman Wiriagar Overseas holds a 3.06 percent stake.

“We are engaging closely with SKK Migas, the Ministry of Energy and Mineral Resources and other related government agencies to receive these critical approvals. We remain hopeful that they will be received soon,” BP Regional President Asia Pacific Christina Verchere said.

Tangguh produces gas from Papua Barat offshore sites and delivers LNG to customers around Asia and the US.

Tangguh LNG began operating in 2009.