O

il and gas giant BP is waiting for certainty over its gas reserves to go ahead with its plan to build a third liquefied natural gas (LNG) train at the Tangguh LNG plant in Papua, upstream oil and gas regulator BPMigas said.

“The company is currently in the final phase of studying the reserves at the Tangguh gas field to check whether it can supply gas to the planned train,” BPMigas spokesperson Gde Pradnyana told reporters via text message on Monday.

He continued that the construction of the train could only be started after the company ensured that the gas reserves would be sufficient to supply the planned train and there were certain purchasing contracts with buyers.

The planned train will have a total production capacity of 3.8 million tons per annum.

Tangguh is a massive gas project located in the Bintuni Bay area in West Papua with total proven gas reserves of 14.4 trillion cubic feet.

The Tangguh LNG plant consists of two production units, each with capacity of 3.8 million tons of LNG per year.

BP started the first production unit, Train 1, in February 2009 and the second, Train 2, in July 2009.

BP is the operator of the Tangguh field, holding a 37.16 percent stake in the project. Other partners are MI Berau B.V. (16.3 percent), China-based CNOOC (13.9 percent), Nippon Oil Exploration (Berau) (12.23 percent), KG Berau/KG Wiriagar (10 percent), LNG Japan Corporation (7.35 percent) and Australia-based Talisman (3.06 percent).

BPMigas says that the Tangguh gas field has been the fourth largest contributor to national gas production. The agency expects the field will produce 879.57 million standard cubic feet per day (mmscfd) in 2011, up from the previous target of 859.16 mmscfd.

BP announced that it will invest around US$10 billion over the next ten years to crank up production at the Tangguh LNG plant and explore the country’s coal-bed methane (CBM) potentials, according to a report from Bloomberg.

BP chief executive officer Bob Dudley affirmed his company’s commitment to continuously
invest in Indonesia after meeting with President Susilo Bambang Yudhoyono and Energy and Mineral Resources Minister Darwin Zahedy Saleh on Friday.

“Our focus in investment is Tangguh in Papua, which we know we handle with great care as that’s already a very large project for BP,” he said.

The company, which has operated in Indonesia for more than 35 years, reported that as of today, it has invested around $7 billion.

Dudley said that the company would develop CBM blocks in Kalimantan. The company had signed four CBM production sharing contracts (PSC) in the Barito basin.

The $5 billion Tangguh project, which shipped its first LNG cargoes in 2009, has multi-year contracts to supply 2.6 million tons a year to China, 1.15 million tons a year to South Korea and an agreement to supply as much as 3.7 million tons a year to Sempra Energy, Bloomberg says.

Indonesia is currently the world’s third largest LNG exporter after Qatar and Malaysia.