TANGGUH TRAIN 3 US$ 8 BILLION FID APPROVED

[CATEGORY: OIL AND GAS]

The government has approved the Final Investment Decision (FID) made by British energy giant BP Plc, the operator of the Tangguh LNG plant in West Papua province, and its consortium partners on the Train 3 expansion project, thus allowing the consortium to soon start developing the multi billion-dollar project.

Under the FID, the project's costs are now estimated at US$ 8 billion, much lower than the initial figures of $12 billion - an estimation made prior the collapse of oil prices.

The Train 3 project covers three blocks, namely Berau, Muturi and Wiriagar. The project is majority owned by BP Tangguh Berau Ltd.

The four approved FID documents handed over by Amien to Verchere consist of:

1.     Approval of the value of Authorization for Expenditure (AFE) for the development of Train 3 facilities, both onshore and offshore

2.     Approval of EPC awards for the development of Train 3 and offshore gas facilities (platform and channeling pipeline)

3.     Approval of gas supply to fertilizer firm to be developed in Papua

4.     Approval of financing for the project

SKK Migas Chairman Amien Sunaryadi said Train 3 will play an important role for the 35,000 MW program as 75 percent of the output will be off-taken by state owned electricity firm PT Perusahaan Listrik Negara (PLN) (Persero) to generate 3,000 MW of power. "Besides, the project will supply up to 20 mmscfd for power generation in West Papua," he said.

Around $1.3 billion of the costs will be spent locally to pay for goods and services provided by Indonesian companies. This will strengthen the local industry.

As SKK Migas has approved all the AFE of the project as well as the EPC awards, the EP works are expected to start in the third quarter of this year, which will be followed by construction works. "Operation Is expected to start in 2020," he said.

Upstream oil and gas authority SKK Migas Amien Sunaryadi said that a consortium led by PT Tripatara Engineering has been appointed as the EPC contractor for the onshore part of the Tangguh LNG Train 3 project in West Papua.

He said that other members of the consortium are Chiyoda and PT Saipem Indonesia. The value of the EPC contract is US$ 2.43 billion.

Meanwhile, Amien said for the offshore part, PT Saipem Indonesia has been appointed as the EPC contractor with contract value of $ 448 million.

For pipeline works, PT Aksia has been appointed as the contractor with project value of $ 60 million.

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