The Expanding Tangguh LNG

The Tangguh LNG Train #3 is under construction. Photo courtesy of Moch. Ali Masyhar.

The Government of Indonesia has granted a 20-year extension of the Tangguh production sharing contract (Tangguh PSC). Under the agreement, the Tangguh PSC which is due to expire in 2035, has been extended to 2055.

The Tangguh PSC covers three work areas. They are Berau, Muturi, and Wiriagar.

The partners under the Tangguh PSC are BP as the operator, MI Berau B.V., CNOOC Muturi Ltd., Nippon Oil Exploration (Berau) Ltd., KG Berau Petroleum Ltd., KG Wiriagar Petroleum Ltd., and Indonesia Natural Gas Resources Muturi Inc.

The 20-year contract extension is expected to generate 5 billion USD in revenues for the government of Indonesia.

Anja-Isabel Dotzenrath, BP’s EVP of Gas & Low Carbon Energy, said: “This extension reflects BP’s long-term commitment to Indonesia. It will allow us to continue to build on the great work that our Indonesia team has been doing with our partners and the strong support of the Government to deliver much-needed natural gas safely and reliably from Tangguh to Indonesia, and other markets. Today’s agreement will help open new possibilities for Tangguh’s future.”

The prolific Tangguh is currently the largest gas-producing work area in Indonesia, accounting for around 20% of the country’s gas output. It has generated significant revenues for Indonesia, both at the national government level and in both Papua Barat province and Teluk Bintuni regency where the project is located.

To process the produced natural gas, the Tangguh LNG was constructed in 2009. The plant has safely delivered more than 1,450 cargoes of LNG to both local and international markets.

Its two LNG production trains have a combined liquefaction capacity of 7.6 million tons of LNG a year.

A third LNG train is currently under construction and is expected to come online in 2023, increasing Tangguh’s production capacity by 50%. 

BP and its partners are also working on the Tangguh UCC project, for which the Government of Indonesia approved a Plan of Development in 2021. The project comprises the development of the Ubadari gas field, enhanced gas recovery (EGR) through carbon capture, utilization, and storage (CCUS) in the Vorwata field, and onshore compression.

BP has vast interests in Indonesia. As the operator of the Tangguh project, BP also has interests in the Andaman II block offshore Aceh and has recently signed new PSCs for Agung I and Agung II blocks. 

Source: BP Press Release on 23 December 2022

Leave a Reply