BP and its partners have made final investment decision to move ahead with the development of the Tangguh expansion project (Train 3) in the Papua Barat Province of Indonesia.
The expansion project will add 3.8 million tons per annum (mtpa) of liquefaction capacity to Tangguh, bringing the total capacity to 11.4mtpa.
Scheduled to commence production in 2020, the expansion project also involves development of two offshore platforms, 13 new production wells, a new LNG jetty, and supporting infrastructure.
Indonesia’s state owned electricity firm PLN (Persero) has agreed to purchase 75% of the LNG production from the Train 3 while the remaining volumes are sold to Kansai Electric Power Company.
BP Group CEO Bob Dudley said: "The Tangguh Expansion Project demonstrates BP and its partners’ continued confidence in Indonesia and our commitment to work closely with the government to meet the country’s energy needs, while creating thousands of jobs."
The Tangguh expansion project, which is expected to create 10,000 jobs over the project period, has already secured development approval from Indonesian government in late 2012.
In May, BP announced to reduce the cost the project from $12bn to $8bn, reported Reuters.
Indonesian energy minister Sudirman said: "This final investment decision was made after confirmation with Tangguh production-sharing contractors and is based on commercial considerations."
Commissioned in 2009, the Tangguh LNG facility consists of offshore gas production facilities supplying two 3.8mtpa liquefaction trains.
BP Berau and its affiliates in Indonesia own a 37.16% stake in the project while other partners include MI Berau with 16.30% stake, CNOOC Muturi 13.90%, Nippon Oil Exploration 12.23%.
The Tangguh production sharing contract partners also include KG Berau Petroleum and KG Wiriagar Petroleum with 10%, Indonesia Natural Gas Resources Muturi 7.35%, and Talisman Wiriagar Overseas 3.06%.
Image: The Tangguh LNG facility located in Papua Barat Province of Indonesia. Photo: courtesy of MITSUI & CO., LTD.