Project Experience ! Tangguh LNG - West Papua

The Tangguh gas fields, situated near the Bintuni Bay region of West Papua province, were discovered by ARCO Exploration in the mid 1990s. Called 'Tangguh' after the Indonesian word for 'resilient', the reserves are estimated to be over 18.3 trillion ft³. These fields have the potential to become one of the world's premier natural gas supplies. In 1997 the Tangguh LNG project was initiated by ARCO and Pertamina to exploit these gas fields; the six fields include two super-giant gas fields (Wiriagar Deep and Vorwata) as well as several smaller adjacent fields (Roabiba, Ofaweri, Wos and Ubadari).

TANGGUH LNG PROJECT OVERVIEW

The Tangguh LNG Project involves tapping the Tangguh fields, processing the gas into LNG and loading it for shipment. The project includes plans for two unmanned offshore production platforms that will pump gas from the reservoir and then relay it through subsea pipelines to an LNG processing facility in Bintuni Bay where the village of Tanah Merah is currently located. The LNG gas liquefaction plant will initially consist of two liquefaction trains with a combined capacity of 7 million t/yr LNG. There will also be the associated jetties and marine facilities of a tanker terminal to export the gas via tanker to markets in East Asia and North America.

The land acquired for the LNG processing facility measures 3,200ha, much of which will remain an environmental 'green zone' as the initial facility will only require 800ha. The investment into the project is estimated at $3 billion. On consultation with the local community the construction of the processing plant has resulted in the relocation of the communities of Tanah Merah, a village that has been inhabited by 127 families and also Onar. The land was acquired in 1999 and involved a negotiation of resettlement agreements; specific agreements detailing BP and community agreements (including village and house design) were developed in 2002 and 2003 (the village move was scheduled for July 2004). The contractors responsible for construction of new village facilities for Tanah Merah are Panata Thiess Joint Operation and for Onar PT Firma Irian Djaya.

PERSONNEL

When fully operational, the project will require an estimated 500 personnel for on-shore and offshore activities, many of whom are currently undergoing training. Papuan engineers have been recruited since 2000 and are now in training at various petroleum facilities to prepare them for their roles on the Tangguh Project. The initial pool intake consisted of 29 individuals. In different batches they are currently gaining experience in BP's Java operations, and undergoing training at the Oil and Gas centre at CEPU and in other areas.

PRODUCTION SHARING CONTRACTS (PSC)

BP is the operator of the Tangguh Project as a PSC contractor to the Indonesian oil and gas regulatory body, BPMIGAS (Pertamina was also involved). In April 2003, the authority to operate the LNG plant was handed over from Pertamina to BP in line with Pertamina's change from regulator to a stand-alone company. The gas fields are covered by three separate PSCs. The Muturi, Berau and Wiriagar fields are each shared by different partner shareholders in the Tangguh Project as of May 2004: BP - 37.16%; MI Berau BV (held by Mitsubishi Corporation )