BP, Inpex Projects in Indonesia Awaits Government Approval

BP plc expects approval for an environmental study relating to the proposed expansion of the company's Tangguh liquefied natural gas (LNG) plant in Bintuni Bay, West Papua, Indonesia in April or May, according to BP Indonesia's head Dharmawan Samsu as quoted in the Jakarta Post Wednesday.

Hearing on Tangguh project’s environmental study had been completed and official approval is needed before BP can add a third train - with a capacity of 3.8 million tons per year - at the site. The Tangguh LNG project now has two trains, which can produce around 7.6 million tons per year of LNG.

“We are also expecting to announce the winner of the FEED (front-end engineering and design) tender for the Tangguh expansion soon. Moreover, we are in the final stages of a discussion with (state-owned electricity firm) PT PLN about an electricity sale and purchase agreement,” Dharmawan said.

The final investment decision for the $12-billion Tangguh expansion is expected in 2015, with completion of work scheduled for 2019.

Separately, the Indonesian government is still studying a request by operator Inpex Masela Ltd. for contract extension of deepwater Masela block - which includes the Abadi field that holds an estimated proven reserves of 6.05 trillion cubic feet (Tcf) of gas - in the Arafura Sea in eastern Indonesia to 2048.

“We are evaluating it (the contract extension request). The Masela project must go ahead,” Indonesia's Deputy Energy and Mineral Resources Minister Susilo Siswoutomo told Jakarta Post.

Inpex hopes to secure more certainty for the project from the Indonesian government as Abadi development is expected to come onstream only in 2018, leaving the firm with only 10 years for production before the Masela block contract expires in 2028, according to Special Task Force for Upstream Oil and Gas Business Activities (SKKMigas) deputy planning head Aussie Gautama as reported in the Indonesia daily.


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