Eric Watkins
Senior Correspondent
LOS ANGELES, Nov. 2 -- Indonesia's Tangguh gas field will begin exporting LNG to South Korea or China by early 2009 as scheduled, according to a senior government official.
Kardaya Warnika, chairman of government oil and gas agency BP Migas, said preparations at the Tangguh gas field are 80% complete, and production of LNG is expected to start in late 2008.
"The first delivery will go to either South Korea or China," he said, adding that, "South Korea is more prepared because it already has a gas storing terminal."
Current buyers for Tangguh's output include China's Fujian (2.6 million tonnes/year), South Korean K-Power and Posco (1.11 million tpy) and Sempra Energy on the western coast of Mexico (3.6 million tpy).
However, the Indonesian announcement coincided with reports that Mexico's gas regulator Comision Reguladora de Energia approved the modification of the permit for the Costa Azul LNG regasification terminal and storage facility to allow its expansion.
According to the statement, the regasification capacity of the Costa Azul project will be expanded to 2.6 bcfd from 1 bcfd and its storage capacity will be increased to 320,000 cu m through the construction of two additional tanks.
Owned by Sempra LNG, the Costa Azul plant in Ensenada, Baja California, is due to start operations in 2008. Sempra LNG and Royal Dutch Shell PLC equally split the terminal's capacity under a 20-year agreement.
Last month, BP Berau Ltd., operator of the Tangguh LNG project, announced it is considering construction of as many as eight additional LNG trains at the company's existing site in Papua (OGJ Online, Oct. 26, 2007).
Contact Eric Watkins at [email protected].