UK supermajor BP and its partners have obtained a 20-year extension of the Tangguh production sharing contract in Indonesia, securing the future of a key liquefied natural gas project where carbon capture, utilisation and storage (CCUS) is planned in the next development phase.
The operator now plans to accelerate exploration activity on the asset, in a bid to discover more feed gas for LNG exports and for the domestic market.
“With the extension, we will be able to continue our important work to meet the country’s energy demand by expediting exploration activities, contributing to the state’s revenue and further supporting the local economy,” said BP’s regional president for Asia Pacific gas and low carbon energy, Kathy Wu.
“With our recent addition of other blocks in Indonesia, this also reflects our confidence in the government of Indonesia as we continue to invest in country and deliver energy solutions.”
Tangguh is the largest producing gas field in Indonesia, accounting for around 20% of the nation’s gas output.
It has generated significant revenues for Indonesia, both at the national government level and in Papua Barat (West Papua) province and Teluk Bintuni regency, where the project is located.
Current production is 1.4 billion cubic feet per day of gas, which will increase to 2.1 Bcfd once Train 3, which the government has designated a project of national strategic importance, comes into operation.
The Tangguh LNG project started up in 2009 and has delivered more than 1450 cargoes to both local and international markets.
Its two liquefaction trains have combined liquefaction capacity of 7.6 million tonnes per annum, and the third train under construction is expected to come online next year, increasing Tangguh’s production capacity by around 50%.
EGR-CCUS
In addition to Tangguh Train 3, BP and its co-venturers are edging forward with the proposed Tangguh UCC project, for which the Indonesian government approved a development plan in 2021.
The project comprises development of the Ubadari gas field, enhanced gas recovery through CCUS in the Vorwata field, and onshore compression.
“Once the CCUS project is implemented, which is subject to a final investment decision by Tangguh partners, it will remove up to 90% of the reservoir-associated [carbon dioxide] which represents nearly half of Tangguh LNG emissions, making Tangguh one of the lowest [greenhouse gas] intensity LNG plants in the world,” said the project’s Japanese co-venturer JX Nippon Oil & Gas.
“With extension of the PSC, we will contribute to stable supply LNG as well as reduce CO2 emission[s].”
The Tangguh PSC, which comprises the Berau, Muturi and Wiriagar contracts, will now expire in 2055 rather than 2035.
BP executive vice president for gas and low carbon energy Anja-Isabel Dotzenrath said: “This extension reflects BP’s long-term commitment to Indonesia.
“It will allow us to continue to build on the great work that our Indonesia team has been doing with our partners and the strong support of the government to deliver much-needed natural gas safely and reliably from Tangguh to Indonesia and other markets. [This] agreement will help open new possibilities for Tangguh’s future.”
BP and its affiliates hold 40.22% in the Tangguh project, MI Berau has 16.3%, China National Offshore Oil Corporation holds 13.9%, Nippon Oil Exploration in on 12.23%, KG Berau Petroleum has 8.56%, Indonesia Natural Gas Resources Muturi holds 7.35% and KG Wiriagar Petroleum has 1.44%.
Also in Indonesia, BP has a stake in the Andaman II block offshore Aceh and has recently signed new PSCs for Agung I and Agung II blocks.
