Tangguh gets go ahead if 60% capacity sold: BP Migas

Indonesian upstream oil and gas authority said on Wednesday green light to commence construction of Tangguh LNG center in Papua would only come after the operator BP PLC was able to secure sales contract of at least 60 percent of the planned 7 million tons per year first-phase production capacity.

?Otherwise, lenders would not be willing to inject money to finance the construction. That?s why BP Migas, together with Pertamina and BP is in very aggressive marketing mode to sell Tangguh LNG,? said BP Migas chairman Rachmat Soedibjo.

Tangguh LNG had secured contract to supply 2.7 million tons per year of LNG to China;s Fujian province starting 2007,and is scrambling to find additional 1.5 million per year contract to justify construction.

Tangguh had participated in LNG bid held by Taipower to supply 1.6 million tons per year of LNG to Taiwan and in Posco and SK Corp.?s bid to supply 1.1 million per year of LNG to South Korea starting 2007. BP PLC, the operator of Tangguh LNG is also aggressively trying to sell LNG to Japanese buyers, but thus far, it had not been able to bag contract.

It is not clear what would happen to Tangguh if it fails to bag contract by next year.

Rachmat said BP Migas and BP would decide the winner of Tangguh fisrt phase EPC contract next month. Three consortiums led by Technip, Chiyoda and Kellog Brown and Root had been shortlisted as Tangguh EPC contractor. (alex)