JAKARTA: British oil and gas company BP has submitted its final investment development (FID) decision over Train 3, the expansion of the existing Tangguh liquefied natural gas (LNG) plant in West Papua on Friday. It is expected construction can commence in the fourth quarter of this year and the project is targeted to be onstream in 2020.
“This final investment decision has been long awaited, not only by BP but also Indonesia. Tangguh would play a big role in supplying energy to Indonesia with state-owned electricity firm PLN as its biggest consumer,” BP’s regional Asia-Pacific president, Christina Verchere, said on Friday at the Energy and Mineral Resources Ministry office in Jakarta.
She said the Train 3 plant was set to supply 3.8 million tons per annum (mtpa) of LNG, bringing the total supply of Tangguh LNG to 11.4 mtpa. “Following the FID, the key engineering project is likely to immediately begin,” said Verchere, adding it was expected the project would create a multiplier effect, generating about 10,000 jobs.
The Energy and Mineral Resources Ministry’s director general for oil and gas, IGN Wiratmaja Puja, said BP would provide 75 percent of an estimated total production of 3.8 mtpa, as well as 1 million tons of LNG per year to Japan-based Kansai Electric Power.
Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) chief Amin Sunaryadi explained that in the plan of development (POD) of the expansion of the Tangguh LNG project, the investment of Train 3 initially amounted to US$12 billion, but because of some adjustments on EPC services, the investment in this project amounted to only $8 billion.
“The estimated investment of this project now amounts to only $8 billion because of the plunge in global oil prices, which have impacted the costs of EPC services,” Amin said.
Energy and Mineral Resources Minister Sudirman Said said the Train 3 project was important because Indonesia required a considerable amount of energy. The project was also deemed crucial because it was located in Papua, which became the focus of attention of the government for realizing its strategic projects, including for supporting its plan to generate 35,000 additional megawatts of electricity, he added.
“FID is a milestone, but there many challenges ahead,” the minister said.
