Tangguh POA, EPC contract signed

Indonesian upstream oil and gas authority BPMIGAS said on Monday it had finally signed the long-awaited principles of agreements (POA) on Tangguh LNG project, clearing the latest hurdle for operator BP to commence full scale development of the giant gas field which is located in Indonesia? s easternmost province of Papua.

?The POA was signed on Friday,? said BPMIGAS chairman without elaborating further.

Separately, BPMIGAS legal division head Alan F. Panggabean said that the POA was signed on Friday after ministry of finance agreed to clauses regarding ?government act? on the POA.

The agreement has effectively removed the latest hurdle in the signing of the POA agreement. BP's disagreement over the content of the Government Act has caused the delay in the commencement of the LNG project. Under the POA signed, scope of government act would be limited to decision taken by president, ministers and governors, not until regental policy as earlier demanded by BP. Under the government act, government would be held responsible should there be policy issued caused breach to LNG contracts BP had signed with its customers.

Alan further said that at the same day, BP has signed EPC contract for Tangguh. None of BP official can be contacted for confirmation. Earlier reports said that a consortium led by engineering firm Kellog, Brown & Root (KBR) was appointed winner of Tangguh EPC works.

Tangguh LNG plant first phase would be built with capacity of 8 MTPA, with production commencement slated in 2008. Tangguh has secured 7.6 MTPA LNG supply contracts to China, South Korea and USA. (godang)