JBIC to conduct due diligence on Tangguh LNG project

Japan Bank for International Corporation (JBIC) is expected to conduct a due diligence process next month on the Tangguh liquefied natural gas project as the bank plans to help finance the project, according to a government official.

?The bank may provide loan amounting to 60 percent of the project?s total investment cost of US$1.4 billion,? Rachmat Soedibjo told reporters on Tuesday during a coffee morning meeting with Minister of Energy and Mineral Resources.

Earlier, the government has also asked Bank Of China to also help finance the Tangguh project.

The government reportedly had asked BP and other Tangguh interest holders to start developing Tangguh LNG plant in April by using their own funds while waiting for loans from creditors.

Thus far Tangguh had secured two LNG supply deals; one with China's province of Fujian (2.6 million tons per annum) starting 2007, and the other one with South Korean companies SK and Posco (1.1 MTPA). Another deal with US energy trader Sempra Energy is being finalized. Tangguh is also eyeing opportunities to supply LNG to Japan, world's number one LNG importer.

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. (Godang)