Panel works to ensure smooth development of Tangguh LNG project

An independent advisory panel is working to enable BP-operated Tangguh LNG project to navigate through turbulent Papua social and political dynamism by drafting strategies to give maximum benefit to Papuan people and making sure that the multi billion dollar project would run smoothly.

"Tangguh project is of enormous significance to BP, Indonesia and the people of Papua. Therefore the panel will work through its recommendations to BP to make sure that people of Papua receive the maximum benefit they can get from the project," said George Mitchell, a former US senator who leads Tangguh Independent Advisory Panel, which was set up by BP in 2001 to provide advice on non commercial aspects such as economic, political and social of the Tangguh LNG project. The other panel members are Lord Hannay, a British senior ex-diplomat and from Indonesian side senior diplomat Sabam Siagian and Papuan society leader and pastor Herman Saud.

Mitchell in an interview with reporters on Wednesday in Jakarta said that based on extensive consultation the panel had with Tangguh stake holders, there were currently three main concerns that BP should address in order to get the project run smoothly covering social, political and economic sides.

The panel's concerns including the strategy to avoid social disturbances in northern and southern shores in Bintuni Bay. Gas sources are located mostly on northern shore, while gas production facilities, which will be the center of construction activities, are located on the southern shore. He said that equal development pace must be created for both sides of the area.

Another concern is to ensure employment of Papuans in the project. Mitchell said that the project must absorb the maximum number of local people as possible and also the project must absorb optimum volume of local materials content.

President of BP Indonesia Anne Drinkwater said BP had already employed some Papua people at its oil and gas project in Bontang, East Kalimantan, and at the Offshore North West Java project. He said that eventually this people would be recruited to the Tangguh project, which is estimated to employ between 350-500 people.

Panel members Lord Hannay and Sabam Siagian said that the project must also be able to adjust to political dynamic in Papua. The former Papua province has been split by the central government into two provinces: Papua and West Irian Jaya. But the division has been opposed by a number of people in Papua and had created social tension. Under the special law, Papua has already elected the so called Papua People Assembly (MRP) members, which has a say in drafting laws and regulations. "BP must be able to work closely with MRP," said Hannay.

The panel has extensive consultation with a wide variety of Tangguh stakeholders and thorough regular site visit to Papua. The panel, based on its consultation with stakeholders, issues an annual review and regular reports, to which BP publicly responds.

The panel was established in 2001 for three years and in 2004 was extended for another three-year.

Tangguh LNG project, which will have initial capacity of 8MTPA, will commence LNG shipment to China, South Korea and USA in 2008. (alex)