Govt urged to set price of Tangguh Train 3 LNG

By Godang Sitompul

Upstream authority BPMIGAS urged the government to quickly determine the price of LNG to be produced from the Tangguh LNG Train 3 facility, part of which to be allocated for the domestic market.

Deputy for Planning at BPMIGAS, Widiyawan Prawiraatmadja told Petromindo.com Tuesday that the BP-operated Tangguh LNG in West Papua has agreed to allocate 40 percent of the production from the Train 3 facility to be allocated for the domestic market, and 60 percent for the export market. ?It will be the best possible price,? he said.

Separately, Director General of Oil and Gas Evita Legowo said that the government has yet to determine the domestic price of the Train 3 LNG, but it would be likely in the range US$11-13 per mmbtu.

She added that the complete details of the agreement on the Plan of Further Development (POFD) for the third liquefaction train (Train 3) for Tangguh will be unveiled end of November, although some of the points have been disclosed last week in London during a visit by President Susilo Bambang Yudhoyono.

The POFD is an important step in preparation for the final investment decision of the Train 3, which is currently expected to be taken in 2014. This would potentially enable operation commissioning for the new train to begin in late 2018. Total investment in Train 3 by Tangguh project partners is currently estimated to be up to US$12 billion.

Evita also said that while BP has agreed to allocate 40 percent of the Train 3 output for state-owned electricity firm PLN, the government will seek for more allocation to the domestic market.

Editing by Reiner Simanjuntak