BP has decided on Tangguh capacity

Anglo-American energy giant BP PLC has decided to build two liquefied natural gas (LNG) trains at the Tangguh complex, each with the capacity of 3.8 million tons per annum, according to a BP senior official.

Until recently, BP only said that it and its partners would build two LNG trains with a combined capacity of between 7 to 8 million tons per year.

Lukman Mahfoedz, senior vice president of Tangguh LNG, also said on Thursday BP and its partners would make a ?final investment decision? mid-December.

He further said the consortium would provide ?bridging finance? for the development of the two trains on schedule if they could not secure banking loans for the project in the near future.

Earlier, Rachmat Sudibyo, head of the country?s oil and gas regulatory body BP Migas said the BP-led consortium would start the construction of the trains in January.

He said the consortium had been negotiating with the Japan Bank of International Cooperation (JBIC) and a consortium of Chinese banks for loans to finance the project.

The project is estimated to cost about US$5 billion, of which BP and partners will cover $2 billion with the remaining $3 billion expected to come from lenders.

BP has so far secured deals to supply a combined 7.6 million tons of LNG worldwide, including to San Diego-based Sempra Energy, South Korea's K-Power Co. and steel maker Posco, as well as a plant in China's Fujian province.

Last year, BP named Halliburton Co.'s Kellogg Brown & Root unit to build Tangguh.

BP holds a 37.16 percent stake in the project in partnership with MI Berau BV (16.30 percent), CNOOC Ltd (16.96 percent), Nippon Oil Exploration Berau (12.23 percent), KG Companies (10.0 percent) and LNG Japan Corporation (7.35 percent). (Alex)