T

he Tangguh plant, a massive liquefied natural gas (LNG) facility in Papua, may operate only at half capacity next year with demand not yet fully recovered from the fallout of the global economic downturn, an official says.

The plant comprises two production units, known as trains, each with a production capacity of 3.8 million tons of LNG per year.

At present, the plant can produce up to 100 shipments of LNG per year. However, it the will likely only make 50 shipments in 2010, upstream oil and gas operator BPMigas chairman R. Priyono said Thursday.

"This is based on the assumption that the global economy next year will remain the same as this year," Priyono told reporters on Thursday.

Energy giant BP, the Tangguh LNG plant operator, has signed multi-year contracts to supply LNG to several buyers, including with Korea's POSCO and K-Power (for a total of 1.15 million tons of LNG per year) and CNOOC (for 2.6 million tons per year).

Buyers appeared to have no problem with the reduction in output, since their demand would also decrease in accordance with the their countries' economic conditions, Priyono said.

"The plant can only produce at full capacity when buyers are ready to accept LNG shipments at full capacity as well," Priyono said.

LNG the buyers will inform BPMigas as to how many shipments they would require for next year, before the end of this year, said Ira Miryawati, the head of BPMigas' oil and gas facilities utilization division.

"We don't yet know how many shipments they want for next year," she said.

Tangguh failed to meet its shipment target for this year because of technical problems at two of its production units. Earlier, the project was expected to deliver 56 shipments, but last month BP Indonesia said it may only be able to produce 16 shipments of LNG this year.