Indonesia expects Bank Of China to lend $1 billion to Tangguh project

Bank Of China is expected to provide a $1 billion loan to help finance Indonesia's Tangguh liquefied natural gas project, an Indonesian official said Wednesday.

Kardaya Warnika, the vice chairman of the Indonesian upstream oil and gas watchdog BP Migas, told reporters that Bank Of China is expected to disburse the loan in October.

He added that the Japan Bank for International Cooperation is also expected to provide a loan for the Tangguh gas project, which will be developed by a consortium led by BP PLC .

However, he declined to say how much JBIC will provide.

The Tangguh LNG greenfield project is expected to produce 7 million tons of LNG a year from two initial processing trains, with first production due in 2007.

A consortium led by Kellogg, Brown & Root of the U.S. was the successful bidder for the engineering, procurement and construction tender of the two plants, which are expected to cost $1.4 billion.

In 2002, Indonesia signed a contract with China to sell 2.6 million tons of LNG a year from 2007 from Tangguh to the southeastern province of Fujian.(*)