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il and gas giant BP has formally submitted its expansion plan, to build a third liquefied natural gas (LNG) train at the firm’s Tangguh plant in Papua, to the upstream oil and gas regulator of Indonesia,
BPMigas.

BPMigas spokesman, Hadi Prasetyo, said in Jakarta on Wednesday that the UK-based company had submitted its Plan of Further Development (POFD) for the third LNG train, which will have a production capacity of 3.8 metric tons per annum (MTPA), earlier this month.

The regulator, he said, was currently discussing the endorsement of BP’s expansion plan and hoped to publish the POFD approval in October this year.

“We only have one item left to be discussed, as such, we are hopeful that the approval for the POFD can be reached next month,” he told The Jakarta Post in a telephone interview.

The POFD contains economic and technical details of the expansion plan and will be used as the basis for the construction of BP’s third train.

According to Hadi, BPMigas was currently mulling over bookkeeping details, such as whether its cost recovery would be separated from the two existing LNG trains at the Tangguh plant in Teluk Bintuni,
West Papua.

BP holds a 37.16 percent stake in the massive Tangguh plan. BP’s partners in Tangguh include MI Berau BV, which holds a 16.3 percent stake in the plant; CNOOC Ltd. (13.9 percent), Nippon Oil Exploration (Berau) Ltd., (12.23 percent), KG Berau/KG Wiriagar (10 percent), LNG Japan Corporation (7.35 percent); and the Australia-based Talisman (3.06 percent).

The plant currently comprises two production trains with a maximum output of 7.6 million tons of LNG a year. BP started production at the first LNG train in February 2009 and the second one in July 2009.

The third train, which will have a production capacity of 3.8 million tons of LNG per annum, (MTPA), will bring the total production capacity to 11.4 MTPA.

All of the LNG currently produced is exported, with 3.6 MTPA sent to Sempra Energy in the US, 2.6 MTPA to China and 1 MTPA to South Korea.

Separately, in an email, BP Asia-Pacific regional president William Lin said the POFD was an important step in preparation for the final investment decision, expected to be completed by 2014, which would enable Train 3 to commence operation in late 2018.

“The total investment in Train 3 by BP and its partners is estimated to be up to US$12 billion,” he said, adding that the POFD included “provisions that will support the energy needs of the local West Papua communities, Indonesia and Asia in the immediate and long-term”.

In May, BP, the Energy and Mineral Resources Ministry’s Oil and Gas Directorate and BPMigas agreed that up to 40 percent of the LNG from the third train would be allocated to the domestic market, this would include the supply of LNG to the state electricity firm PT PLN.

In addition, starting in January, BP and its partners will sell 4 megawatts (MW) of electricity from the Tangguh plant to PLN to be distributed to local communities. (asa)