Tangguh LNG plant to close for maintenance
Tuesday, February 18 2014 - 02:06 AM WIB
?The shutdown is in accordance with BP?s plans, but we have asked them to do it faster,? Muliawan, deputy director of operations at upstream oil and gas authority SKKMigas, said in Jakarta on Monday.
BP is the operator of Tangguh LNG with 37.16 percent stake. It operates two trains, facilities that turn natural gas into liquefied natural gas, with a combined capacity of 7.6 million tons per year.
BP and partners plan to invest a further $12 billion to build another train on the site, which will boost the capacity by another 3.8 billion tons a year. The Tangguh LNG operation caters to exploitation activities in several natural gas fields in the area with combined reserves of 14.4 trillion cubic feet.
Regular maintenance shutdowns put a burden on the country?s declining oil and gas production, which is dragged down by slow investment in the sector. The government plans to streamline the bureaucracy in oil and gas operations in order to attract more investment and accelerate project deliveries.
SKKMigas Acting Chairman Johannes Widjonarko said his office was seeking approval from the coordinating minister for economic affairs to reduce the number of permits required for oil and gas operations. Typically in Indonesia, an upstream project requires at least 284 different permits. The government plans to cut that to 64, which would be divided into eight clusters.
?The number of permits is still being audited by the Financial Development Comptroller (BPKP). It will assess which permits can be eliminated and which are still necessary,? Johannes said after a hearing at the House of Representatives.
SKKMigas estimates that the sector?s capital expenditure to increase by 32 percent to $25.6 billion this year. Around $14.9 billion, or 77.2 percent of the funds will go to boost production activities, while spending on exploration activities is projected to take another $3.84 billion.
The $25.6 billion spending allotted for this year is expected to generate revenues of up to $30.6 billion for the state, from 870,000 barrels of oil per day and 7.175 billion British thermal units of natural gas per day.
The number of permits required for an upstream project is a major hurdle in the government?s attempts to bolster output. In addition, companies also deal with the difficulties of land acquisition for onshore projects and the expensive cost to pay tax for offshore projects.
The government has vowed to alleviate some of the problems but so far it has failed to garner significant momentum, which can be seen in the persistent lack of interest from companies to bid for the oil and gas blocks the government have to offer. (*)