BP gets Tangguh PSC extension as it works to launch third LNG train

BP and its partners have secured a 20-year extension for the Tangguh production sharing contract as they continue to work to launch the third train at the Tangguh LNG facility in Indonesia.

Under the deal signed with the Indonesian government in Jakarta on December 23, the Tangguh PSC, which consists of the Berau, Muturi, and Wiriagar PSCs, would be extended from 2035 to 2055, according to a statement by BP.

Tangguh is the largest gas producing field in Indonesia, accounting for around 20 percent of the country’s gas output, and supplies feed gas to the Tangguh LNG plant in Papua Barat province, which began operations in 2009.

Its production reaches 1.4 billion cubic feet (Bcf) per day of gas through two LNG trains and would reach 2.1 Bcf per day once the third train comes online.

According to BP, the Tangguh plant has delivered more than 1,450 cargoes of LNG to both local and international markets.

Third LNG train

The terminal’s two LNG production trains have a combined liquefaction capacity of 7.6 million tonnes of LNG a year.

BP and its partners are working on the third trains as well. The third liquefaction train will have a capacity of 3.8 mtpa, increasing Tangguh’s production capacity by 50 percent.

BP said it expects the third train to go online next year but it did not reveal any additional information.

The firm and the Chiyoda-Saipem-Tripatra-Suluh Ardhi Engineering (CSTS) consortium, the project’s EPC contractor, originally expected to launch the expansion project in the third quarter of 2020.

However, BP delayed the launch of the project several times due to the Covid-19 pandemic.

Earlier this year, BP’s chief executive Bernard Looney said during the company’s second-quarter results call that BP hopes to start the third train by the end of next year.

Chiyoda confirmed in its quarterly report that the project construction was in the final stage with Indonesia’s regulator SKK Migas saying that the project had entered into the commissioning stage and that it could enter into operation in the first quarter of the next year.

BP Berau and its affiliates in Indonesia hold a 40.22 percent interest in the Tangguh project.

Other Tangguh production sharing contract partners are MI Berau, CNOOC Muturi, Nippon Oil Exploration, KG Berau Petroleum, Indonesia Natural Gas Resources Muturi, and KG Wiriagar Petroleum.

Besides the expansion, BP is also working on a carbon capture utilization and storage project at the facility.

The firm also has interests in the Andaman II block offshore Aceh and has recently signed new PSCs for Agung I and Agung II blocks.                 

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