Tangguh LNG sees delay in project, mulls increasing capacity

BP PLC-operated Tangguh LNG project is expecting to become onstream in 2008, one year-later than originally planned due to various ?administrative? problems, a company senior official said Tuesday.

?The project?s operations commencement will be delayed due to various problems such as government regulations, marketing and commercial arrangements,? said Tangguh LNG president Gerry Peereboom. He hinted that some of the obstacles including contract extension of PSCs areas that formed Tangguh project and completion of loan packages from JBIC and a Chinese bank consortium.

He, however, assured that the delay would not affected Tangguh LNG future buyers. ?Despite the delay, Tangguh would be able to meet its commitments to buyers,? he said.

Tangguh is already contracted to supply 2.7 MTPA to the Chinese province of Fujian starting 2007/2008. Tangguh had also bagged contract to supply 1.1 MTPA of LNG to South Korean firms SK Corp. and Posco starting 2006. LNG supply during 2006-2008 for the South Korean companies would be fulfilled by BP?s overseas sources. Tangguh is also close to sign final LNG deal with Sempra Energy, under which Tangguh will supply 3.7 MTPA of LNG to west coast of USA starting 2008/2009.

Peereboom said Tangguh is also considering expanding capacity the planned first two trains to 8 MTPA, higher than the original plan of 7 MTPA. ?Tangguh is studying the possibility to increase the capacity, because it would be nice for us to have some spare capacity,? he said. But he said thus far, here is no firm decision on the matter. (alex)