T

angguh LNG, an integrated liquefied natural gas (LNG) operation in the country, is expecting to kick off a US$12 billion expansion project pending the results of a tender to be announced early next year.

Tantri Yuliandini, a senior communication officer with BP Indonesia, which operates the Tangguh block in West Papua, said the company was in the process of evaluating the tender that closed September.

'€œWe are expecting to announce the results in the first quarter of 2014,'€ Tantri said Tuesday.

The expansion project involves a plan to boost Tangguh LNG'€™s capacity by 3.8 million tons per year.

Tangguh'€™s capacity is currently 7.6 million tons and is expected to reach 11.4 when the expansion project is completed in 2019.

Tantri said the Tangguh expansion would have its final investment approved next year. The expansion was approved by the government in November 2012.

BP currently operates Tangguh LNG in Papua. The company holds 37.16 percent stake in the gas field project, along with MI Berau BV with 16.3 percent; CNOOC Muturi Ltd. with 13.9 percent; Nippon Oil Exploration (Berau) Ltd. with 12.23 percent; KG Berau/KG Wiriagar with 10 percent; Indonesia Natural Gas Resources Muturi Inc. with 7.35 percent; and Talisman Wiriagar Overseas Ltd. with 3.06 percent.

With the expansion project, Tangguh will have a new LNG facility called Train 3, which will complement Train 1 and Train 2.

It is estimated that the expansion project will require $12 billion in investment.

Once the expansion is completed and operational, Tantri said, Tangguh will be committed to the distribution of 40 percent of the LNG produced by Train 3 to the domestic market.

Moreover, the company also plans to supply up to 15 million cubic feet per day (mmscfd) of gas to a power plant operated by state-owned electricity company PT PLN when the Train 3 project is finished.

Tangguh signed a supply and offtake agreement (SOA) Thursday to supply state electricity company PLN with 4 megawatts (MW) of electricity to be sold and distributed to the residential communities of Teluk Bintuni regency in West Papua.

The SOA was signed following a memorandum of understanding (MoU) that was inked in May 2012.

Under the agreement, electricity supply for the areas surrounding the Tangguh LNG plant in Teluk Bintuni will last 20 years.

BP regional president Asia Pacific William Lin said that a study to increase the supply by another 4 megawatt is under way.

Since becoming operational in 2009, Tangguh has delivered 407 cargoes of LNG to date.

Tangguh has delivered 109 cargoes from earlier this year up to Dec. 15, already higher than the number of deliveries in 2012, which was 103 cargoes.