China's loan disbursement for Tangguh LNG project delayed

The disbursement of loan from Bank of China for the construction of the Tangguh Liquefied Natural Gas (LNG) plant in Papua has been delayed, but it will unlikely affect the schedule of the project, Koran Tempo reported on Thursday.

The Chinese bank had delayed the loan disbursement because the negotiation between the Chinese bank and BP Tangguh as the operator of the LNG plant could not be completed as scheduled.

Kardaya Warnika, the chief of the government's regulatory body for oil and gas exploration and production activities BP Migas, acknowledged that a number of technical problems had impeded the negotiation process.

"The delay in the construction of the receiving terminal for the LNG in Fujian, China is also one of factors that have caused the delay in the loan disbursement," he said.

Bank of China has agreed to provide loan up to US$1.2 billion for the construction of the US$3.5 billion Tangguh LNG plant. China's province of Fujian will be one of the major buyers of the LNG to be produced from the Tangguh plant. (*)