Pertamina, BP may award Tangguh LNG project EPC in October

Anglo-American energy giant BP PLC and state oil and gas company Pertamina might award engineering, procurement, and construction (EPC) contract to build the first two trains of natural gas liquefaction in Tangguh gas fields as early as October this year.

?The construction is expected to be started this year,? said Satya W. Yudha, BP Indonesia vice president for public and government affairs on Tuesday.

Satya said Pertamina and BP had shortlisted Bechtel Corp., Mitsubishi Corp. and Kellog Brown & Root as EPC contractors for Tangguh LNG.

In April 2000, BP had awarded Front-End Engineering Design (FEED) of Tangguh to a consortium of Chiyoda Corp. and Mitsubishi Corp.

The LNG plant will be located in Berau Bay in the easternmost province of Papua. The plant will be able to produce 6 million tones of LNG per year from two processing train. Once complete, Tangguh will join Arun and Bontang as Indonesia's third LNG center.

The Tangguh gas fields contain 18.3 trillion cubic feet (TCF) of independently certified proved and probable natural gas reserves, with an additional 5.4 TCF of possible reserves already identified.

A two train initial development of the Tangguh LNG plant will involve more than US$ 1.5 billion of investment with additional investment required to develop the gas production facilities.

BP is trying hard to win 3.5 million tons per year supply bid to China, which would justify the construction of Tangguh LNG plant.

The plant is expected to become onstream in 2005. (alex)