PRESS RELEASE: Tangguh AMDAL presentation - an historic first in Indonesia

On Monday December 11th 2000, in Jayapura, Irian Jaya, Pertamina and BP presented to the Amdal Evaluation Committee of Irian Jaya their proposed Terms of Reference for the many environmental and social studies required by the new integrated Environmental Impact Assessment (AMDAL Terpadu) for the massive Tangguh Liquefied Natural Gas (LNG) project.

This occasion marks several historic milestones in Indonesia's environmental development, and Pertamina and BP are proud that the Tangguh AMDAL is:

-the first integrated project whose AMDAL will be considered under the rigorous standards introduced by the February 21st 2000 Ministry of Environment Directive;

-the first project in which the views of the local Bapedalda of Irian Jaya will play a significant part in the AMDAL process;

-the first project in which active and extensive consultations with the local communities have taken place. Around 20 representatives of local villages and communities have been appointed to serve as "Andal Evaluation Team Members";

-the first occasion when these local representatives will have received training to maximise their effectiveness on the AMDAL

Commission.

Senior Pertamina official Inoenoe, Project Manager for Tangguh LNG Project commented, "Both Pertamina and BP are committed to the highest environmental standards for the Tangguh project, and we welcome this opportunity to explain our proposals and how we can work together with Bapedal, Bapedalda, all related government agencies, Parliament, and our local communities to make Tangguh a model project in term of transparency, cost efficient an economic, social and environmental success".

Richard Elliott, BP's Senior Project Manager for Tangguh added, "Continuous consultation with all our stakeholders here in Irian Jaya will be key to good environmental performance. That is why Pertamina and BP voluntarily chose to be a pilot project for the new national public consultation regulation "KepKa Bapedal 08/2000" prior to its official enactment in November 7, 2000 and why the presentation to Bapedalda is so important".

The Tangguh Liquefied Natural Gas (LNG) project is an important development for the Indonesian republic and will play a crucial role in maintaining Indonesia's global leadership position in the LNG industry. Furthermore, as Indonesia's existing LNG resources approach maturity, Tangguh will significantly replenish the country's marketable LNG reserves.

The Tangguh LNG project operated by Pertamina & BP and is located in Berau bay, Irian Jaya province. The plant will be able to produce 6 million tones of LNG per annum from two initial processing trains. 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. Over the project's life, Tangguh is expected to contribute up to US$ 20 billion for one train in revenue to Indonesia and would become the single largest direct foreign investment ever made in Indonesia at present. The magnitude of this investment will help renew confidence in the Indonesian economy and open the door for additional foreign investment.

The project can be fully operational by the year of 2005/2006. The initial development phase will involve producing approximately 6-7 million metric tons/year of LNG from between 1,200 to 1,400 million standard cubic feet (MMSCFD) of natural gas feedstock. This initial development will involve up to 25 offshore production wells along with two identical onshore LNG plant processing trains, as well as all the associated LNG storage, marine and plant and personnel support facilities. Initiation of construction activities is currently scheduled to begin in late 2001 or first quarter 2002.

The Tangguh site is expected to provide more than 8,000 temporary jobs during the three-year construction phase and permanent direct employment for more than 400 - 500 for 2 train thereafter at the project site. Although the project is still in the preparation stage, Pertamina and Pertamina have already recruited 12 local people who have graduated from the University of Cenderawasih, the Institute of Science and Technology of Papua, and other institutions, and these numbers will increase as the project develops.

The Tangguh LNG project is a grassroots natural gas development project comprising gas production, transmission, liquefaction, and export. Environmental impacts will be minimised during pre-construction, construction, operation and post operation of the project through the implementation of comprehensive environmental management and monitoring programs. The environmental protection programs will comply with Pertamina and BP environmental protection policies, government regulatory requirements and community aspirations. The project environmental protection and community development programs will be presented in the Tangguh Integrated Environmental Impact Assessment ("AMDAL Terpadu"). This "Amdal terpadu" is the first "integrated Amdal" in Indonesia for oil and gas sector development.

The Amdal Terpadu started with a public participation program which Pertamina and BP pioneered in Indonesia. Project announcement has been carried in Jakarta, Jayapura, Sorong, Fak Fak and Manokwari. Public Consultation has been conducted at 5 kecamatan and 51 villages within the Tangguh project areas. Presently, the Terms Of Reference (TOR) of bAmdal Terpadu has been submitted to the government. The first presentation of the TOR will be carried out in Bapedalda Irian Jaya. (*)