Tangguh III development needs US$3.8 billion

The development of Tangguh Train III in West Papua will need an investment of about US$3.8 billion, which is higher than those spent for Tangguh I and II.

Upstream authority BPMigas expert staff Fathur Rahman said in Jakarta on Wednesday that BP is currently preparing the construction of the Train III.

He said that BP is also trying to find buyers for the LNG from the Tangguh Train III. "The capacity of Train III will be the same as those of Train I and II which is 3.8 million tons per annum (MTPA). Its price will be US$1 million per ton, while the price of LNG from Train I and II is US$250,000 per ton," he said as quoted by Kontan

Gde Pradnyana, BPMIGAS Head of Public Relations, Security and Formality said in Jakarta on Wednesday that the LNG from Tangguh Train III is allocated for domestic market, but if there is no buyer at the local market then it will be exported. "There is no certain buyer yet. They are still in stage of discussions with potential buyers, including PLN and petrochemical firms," he said.

According to Fathur, BPMIGAS cannot yet determine the volume of gas allocation for domestic and export as they have yet to calculate the gas need of petrochemical industry in Papua.

What certain, he said, is that the tender for construcion process of Tangguh Train III will start in November this year. BPMIGAS has asked BP to file its Plan of Development (PoD), which is expected to be finalized later this year.

The construction of the LNG plant is expected to start in 2015, and production will be at the end of 2016 or early 2017.