BP in talks to build third processing unit at Tangguh

Ika Krismantari, The Jakarta Post

British-based energy giant BP Plc.'s local unit, BP Indonesia, said Wednesday that it was in discussions with a group of investors to build the third and final train (processing unit), at its Tangguh liquefied natural gas (LNG) plant in Papua.

"There have been discussions with new investors in the past, some are still ongoing, and we will continue these in the future," BP Indonesia president director John C. Minge said.

While refusing to name names, Minge said that the project had drawn plenty of interest from potential investors.

Earlier this month, the world's largest LNG importer, Korea Gas (Kogas), told The Jakarta Post that it was interested in taking part in the development of a third train at the LNG plant.

The company is currently focusing on building the first and the second trains. Overall, the construction of the plant is 70 percent completed, Minge explained.

He said the company would start in June drilling the first of 15 planned wells in the next 18 months.

Asked about the additional US$800 million needed to finish the Tangguh project, Minge said that a team from BP and its partners, as well as the government, was looking into the issue.

Two major state-owned banks, Bank Mandiri and Bank Negara Indonesia (BNI), have said they might join a syndicate of local and foreign banks to provide the additional funds.

The extra money will come on top of the $2.6 billion disbursed in August for the project by an international consortium of foreign banks.

BP is the largest single investor in the Tangguh plant, and holds a 37.16 percent stake. CNOOC, China's largest offshore oil producer, is the second biggest with 16.96 percent.

Other investors include Mitsubishi Ltd. and Inpex Corp., which hold a combined 16.3 percent interest in Tangguh. A Nippon Oil Corp.-led grouping has a 12.23 percent stake, and LNG Japan, owned by Sumitomo Corp., and Sojitz Holdings Corp. hold 7.2 percent.

Japan Oil, Gas & Metals National Corp., Kanematsu Corp. and Mitsui & Co.'s Overseas Petroleum Corp. hold a combined 10 percent.