Tangguh LNG nears completion, seeks new financing

Eric Watkins
Senior Correspondent

LOS ANGELES, Mar. 1 -- Construction on Indonesia's Tangguh LNG facility is 70% complete, and startup is expected by fourth quarter 2008, if operator BP Indonesia receives further financing for the project, said Kardaya Warnika, chairman of Indonesia's upstream oil and gas executive agency BP Migas.

To build the plant BP needs financing of $6.5 billion altogether, he said, of which $3.5 billion consists of loans, with the remainder coming from the company's own resources.

Warnika said BP Indonesia has secured more than $2 billion in loans and is negotiating with a group of Chinese banks for another $884 million. If BP's current negotiations are successful, these loans should be disbursed in April.

BP secured loans of $2.616 billion in 2006, including $1.2 billion from the Japan Bank for International Corp., $350 million from the Asian Development Bank, and $1.066 billion from commercial banks, Warnika said

Meanwhile, according to BP Migas, Indonesia has signed contracts with Fujian-China for 2.6 million tonnes/year of gas over 25 years, SK Power Korea for 550,000 tonnes/year over 20 years, Posco Korea for 550,000 tonnes/year over 20 years, and Sempra Energy for 3.7 million tonnes/year over 20 years.

BP Indonesia operates the Tangguh block together with Japan's LNG Corp., Nippon Oil Corp., and CNOOC Ltd.

Contact Eric Watkins at hippalus@yahoo.com.

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