BP evaluates Tangguh capacity expansion possibility

Anglo-American energy firm BP Plc said on Tuesday that it had begun evaluation works to study the possibility of expanding Tangguh LNG project capacity and would not start scouting for buyers until detailed analyses was completed.

Budiman Parhusip, BP Indonesia executive vice president in charge of Tangguh LNG development told reporters that the evaluation would include technical works and reserves evaluation. ? For now, we don?t know if we could technically add one or two more LNG train in Tangguh. We hope there will be some clearer picture about capacity expansion possibility and the time frame when the evaluation is progressing next year.

Tangguh LNG project first phase will be built with capacity of 7.6 million tonnes per annum and the capacity had already been fully committed to buyers in USA, China, Jepang and Korea. The project is slated to come onstream in early 2009, has 14.4 TCF of proven reserves.

Budiman said state electricity firm PLN and state gas distribution firm PGN had formally expressed interest to buy LNG from Tangguh should BP and partners decided to expand the plant?s capacity. BP, for the time being, will concentrate on Tangguh?s first phase development, he said. ?Beside, we need proper and detailed analysis (on expansion capacity) before we could get into the market,? he said.

Budiman also said that US$900 million loan negotiation with Chinese banks consortium is well progressing and he hoped BP would be able to sign the loan deal by the end of next year. In August 2006, BP had secured U$2.6 billion syndicated loan from international funding institutions to finance Tangguh project development.

David Clarkson, executive vice president for Tangguh Project said as per end of November, the project had been 60 percent completed and is on schedule to commission the first train in October 2008.

BP is the operator of Tangguh LNG project with 37.16 percent interest. (alex)