Tuesday, August 9, 2011

Tangguh third train should have 3.8m tons of capacity

Upstream oil and gas regulator BPMigas has suggested that BP, operator of the Tangguh liquefied natural gas (LNG) plant in West Papua, build the plant’s third LNG train with a total capacity of 3.8 million tons per annum (mtpa).

BPMigas head R. Priyono told reporters that the number was reached after the agency learned that Tangguh gas production might reach 700 million standard cubic feet per day (mmscfd).

“With that amount of reserves, the third train at the LNG plant should have a total capacity of 3.8 mtpa,” he said, after witnessing the signing of an engineering, procurement and construction contract, for the Cepu block in Central Java, at his office in Jakarta on Friday.

The third train is scheduled to start commercial operations in 2018 but BPMigas has requested BP to accelerate development so that the third train can start operating earlier than its initial plan, he added.

“BP plans to submit the PoD [plan of development] in the near future and I hope the process can be completed this year,” Priyono said.

He expected that LNG from the third train would be used not only to supply the international market, but also domestic gas users. However, he emphasized that BPMigas wants the plant to maintain its current export market in the Asia Pacific region.

Earlier, Evita Herawati Legowo, director general for oil and gas at the Energy and Mineral Resources Ministry, said that half of the third train’s production could be delivered to petrochemical industries at home.

The Tangguh LNG plant consists of two production units with a capacity of 3.8 mtpa per year. BP started production at train 1 in February 2009 and at train 2, in July 2009.

Currently, all LNG produced at the plant is allocated for export. Some 3.6 mtpa of LNG is sent to Sempra Energy in the US, 2.6 mtpa to China, and 1 mtpa to South Korea.

Tangguh is a massive gas project located in the Bintuni Bay area in West Papua, with total proven gas reserves of 14.4 trillion cubic feet. If production runs at 700 mmscfd, the gas will run out in approximately 55 years’ time.

Gas from the field will be used not only to fulfill demands abroad, but also to supply petrochemical industries in Papua, Priyono said. Thus, not all the gas will be converted into LNG: Some will be channeled directly to local customers, he added.

BP is the operator of the Tangguh field, holding a 37.16 percent stake in the project. Other partners are MI Berau B.V. (16.3 percent); China-based CNOOC (13.9 percent); Nippon Oil Exploration (Berau) (12.23 percent); KG Berau/KG Wiriagar (10 percent); LNG Japan Corporation (7.35 percent); and Canadian-based Talisman (3.06 percent).

Priyono said that, in the future, the government will request foreign LNG buyers to relocate their industries to Indonesia so that the country’s energy sources can become the engine of economic growth.

“We hope that in the future, via negotiation, if we sell our LNG to countries like Japan and China, we can request them to relocate their production facilities to Indonesia,” he said.

Source; http://www.thejakartapost.com