Latham advises RI on financing of Tangguh LNG Train 3 project
Wednesday, August 31 2016 - 02:43 AM WIB
Leading international law firm Latham & Watkins LLP said on Tuesday it has represented Indonesia through its oil and gas upstream regulatory agency, SKK Migas, on the financing of the Tangguh LNG expansion project, known as Train 3 project, in West Papua.
Latham said in a statement that the expansion of the Tangguh LNG plant is the first upstream LNG project in Indonesia since 2007, and the only project to reach Final Investment Decision (FID) in the last six months globally. The project includes the construction of an onshore LNG process Train with liquefaction capacity of 3.8 million tons per annum, two offshore platforms, 13 new production wells, a new LNG jetty and supporting infrastructure. This will bring the Tangguh LNG plant to a total capacity of 11.4 million tons per annum (mtpa).
The project is operated by BP Berau Ltd on behalf of the other production sharing contract partners. BP Berau Ltd and its affiliates in Indonesia hold a 37.16 percent stake in the project, followed by MI Berau B.V. (16.30%), CNOOC Muturi Ltd. (13.90%), Nippon Oil Exploration (Berau) Ltd. (12.23%), KG Berau Petroleum Ltd and KG Wiriagar Petroleum Ltd (10.00%), Indonesia Natural Gas Resources Muturi Inc. (7.35%), and Talisman Wiriagar Overseas Ltd. (3.06%).
Latham said the Train 3 project, worth over US$8 billion, is the first in Indonesia to be financed by both international and domestic banks. The total debt amount is US$3.75 billion, split between JBIC direct loan (US$1.2 billion), ADB loan (US$400 million), international commercial bank tranche (US$2.045 billion) and an Indonesian bank tranche (US$100 million). The international banks include four Japanese banks (BTMU, Mizuho Bank, SMBC, Shinsei Bank); three Singapore banks (DBS, OCBC, UOB); two Chinese banks (Bank of China, China Construction Bank); two French banks (BNP Paribas, Credit Agricole), and KDB and KfW. The domestic banks includes four of the state-owned Indonesian banks (BNI, BRI, BTN, Bank Mandiri).
The development of Train 3 of the Tangguh expansion project is vital to the growing energy demands in Indonesia, with 75 percent of the Train 3 annual LNG production being sold to state electricity firm PT PLN. The remaining LNG is contracted to Kansai Electric Power Company, Japan.
Latham said its team was led by partner Clarinda Tjia-Dharmadi in Singapore, with associates Tim Fourteau, Brett Lovellette and Andrew Mamo.
The Tangguh LNG facility is located in Teluk Bintuni Regency (West Papua). It currently consists of offshore gas production facilities that supply two 3.8 mtpa liquefaction Trains. Train 3 is expected to come on stream in July 2020.
Editing by Reiner Simanjuntak