BP Indonesia confident of commercialising Tangguh with or without China deal
Tuesday, July 9 2002 - 10:02 AM WIB
"Between the traditional and new markets, we're confident we'll get Tangguh launched," he told AFX-ASIA on the sidelines of BP's annual energy statistical review.
The Tangguh gas field will initially have two trains and production capacity of 7 MTPA, he said.
BP is "hearing good noises" from traditional customers in Japan, Taiwan and Korea, while it is pushing its way into emerging markets in India and the west coast of America, he said.
The company has already signed a letter of intent with the Philippines for supplying 1.3 MTPA of liquefied natural gas (LNG) from Tangguh.
However, industry observers have raised concerns over the lack of a payment track record from new customers such as the Philippines and insist much of Tangguh's future hinges on the estimated US$9 billion China contract.
A consortium led by BP in partnership with Indonesia's state-owned Pertamina is one of three bidders for the lucrative deal.
The other two are an Australian consortium that includes Royal Dutch/Shell and BHP Billiton which are extracting gas from the North West Shelf, and ExxonMobil's partnership in the Persian Gulf nation of Qatar.
The announcement on the winner was expected some months back. The delay is heating up speculation over who the winner might be or whether the government will divide the contract between the two bidders. There is even talk China will re-tender the contract.
Schrader would not comment on any of these rumors. "I spoke to a man on one side of the room today who said he'd heard a rumor we'd lost, then I walked across to the other side of the room and someone else said, 'Congratulations, I hear you've won'.
"I used to react to that sort of thing but now I just let it roll off me and we'll just have to wait until China makes an announcement," he said.
BP plans to start constructing Tangguh next year and commence delivery of LNG in late 2005 or early 2006, assuming it receives the necessary development approvals from the Indonesian government by the year-end.
Because the field's development is project financed, BP must first secure the sales contracts, which its banks will use to determine the size and terms of funding. (*)