Indonesia will ask BP to allocate about 120,000-180,000 Mcf/day of gas from Tangguh to proposed fertilizer plants, which will be built near the project, a senior energy ministry official said Wednesday.
"The government plans to build 2-3 fertilizer plants in Tangguh and will require about 60,000 Mcf/day gas for each plant," the oil and gas director general at the energy and mines ministry, Evita Legowo, said adding that the gas sales agreements are expected to be signed next year.
BP could not be reached for comment.
The ministry had issued a regulation December 31, 2011, on domestic gas allocation for fertilizer projects throughout the country, including in Tangguh, Papua. It said that gas price would be determined by the energy and mines minister based on the project's economic feasibility and business.
The Tangguh project in Bintuni Bay of Indonesia's far eastern Papua province, includes two liquefaction trains to produce at least 7.6 million mt/year of LNG. It is based on 14.4 Tcf of proven gas reserves in three neighboring production sharing contracts -- Wiriagar, Berau and Muturi.
The fields' proven and probable gas reserves are 18.7 Tcf, while its proven, probable and possible gas reserves are 23.3 Tcf.
BP plans to build a third train with a capacity of 3.8 million mt/year if a study confirms the reserves are enough to make it economically viable.
South Korean Kogas has expressed interest in investing in the train as part of its strategy to get LNG supplies.
Tangguh currently has five long-term LNG supply contracts. They are with China's CNOOC for 2.6 million mt/year for 25 years; with Posco for 550,000 mt/year for 20 years; with K-Power for 600,000 mt/yearfor 20 years; with Sempra for 3.7 million mt/year for 20 years; and Japan's Tohoku Electric Power LNG 125,000 mt/year for 15 years starting in 2010.
BP has a 37.16% interest in Tangguh. The other partners are CNOOC (13.90%), MI Berau BV (16.30%), Nippon Oil Exploration (12.23%), KG Companies (10%), LNG Japan (7.35%) and Talisman (3.06%).
