Tangguh Expansion Project, Papua Barat, Indonesia


Tangguh expansion

The Tangguh Expansion Project is a proposed expansion of the existing Tangguh LNG facility located on the southern shores of Bintuni Bay in Teluk Bintuni Regency of Papua Barat Province.

BP Berau (37.16%) operates the project on behalf of the other partners, including MI Berau (16.3%), CNOOC Muturi (13.9%), Nippon Oil Exploration (Berau) (12.23%), KG Berau Petroleum and KG Wiriagar Petroleum (10%), Indonesia Natural Gas Resources Muturi (7.35%), and Talisman Wiriagar Overseas (3.06%).

Gas for the LNG plant is sourced from six natural gas fields, including Vorwata, Wiriagar Deep, Ofaweri, Roabiba, Ubadari, and Wos. The offshore gas production facilities will be modified, along with the addition of an LNG train as part of the expansion.

The expansion plan for the LNG plant was approved by the Indonesian Government in 2012. The final investment decision was taken in July 2016 and the new facilities are scheduled to come on stream in 2020.

An estimated 10,000 jobs are expected to be generated during different phases of the project, giving a boost to both the Indonesian and Papua Barat Province economies. The project will also help in meeting the rising energy demand in the country as most of the produced LNG will be sold to the state electricity company.

Tangguh LNG project offshore infrastructure

The offshore production facilities supply natural gas to two 3.8Mtpa liquefaction trains and comprise natural gas and associated liquids production, collection and transmission facilities.

Gas is procured from 14 production wells situated at two offshore platforms, namely VR-A and VR-B, at the Vorwata gas field. The onshore LNG plant receives the produced gas via two subsea pipelines where it is purified and processed before being exported by LNG tankers.

The multi-phase subsea pipelines are 19km and 18km-long and 24in in diameter. Power supply, control and chemical injection are managed from onshore.

Project expansion details

The expansion project includes the construction of two offshore platforms as well as 13 new production wells, along with an expanded loading facility and associated infrastructure. The production capacity of the LNG plant will increase by approximately 50% to 11.4Mtpa.

An increase in the Vorwata gas field reserves to 16.9 trillion cubic feet (Tcf) will benefit the expansion project with the potential reserves of Wiriagar Deep, Roabiba, Ofaweri and Ubadari fields expected to increase the total reserves to 20.8Tcf.

An expandable hub platform will be installed at the field for easy mixing of liquids from the fields and to enable processing from any future tie-ins. Infill wells from the existing two platforms will provide additional feed gas to the two LNG trains.

A fourth LNG train is also planned to be constructed as part of the future development and will comprise nine offshore platforms with 16 well slots each, nine subsea pipelines, supporting facilities, and a condensate tank.

"The final investment decision was taken in July 2016 and the new facilities are scheduled to come on stream in 2020."

Integrated subsea power and fibre-optic cables will be installed on the ring-main topology as part of the offshore development and will provide electricity, communication and control for platform operations.

Financing

The project is estimated to cost $8bn and will be financed by both international and domestic banks. A direct loan of $1.2bn will be provided by JBIC, while $400m will be furnished by ADB, a consortium of international commercial banks will lend $2.045bn, and domestic banks will provide $100m taking the total debt to $3.75bn.

The international banks participating in the project include BTMU, Mizuho Bank, SMBC, Shinsei Bank, DBS, OCBC, UOB, Bank of China, China Construction Bank, BNP Paribas, Credit Agricole, KDB and KfW. The domestic banks include four Indonesian banks namely, BNI, BRI, BTN, and Bank Mandiri.

Key players involved with the Indonesian project

An engineering, procurement, construction and installation contract, encompassing the unmanned platforms and subsea pipelines for the offshore facilities, has been awarded to Saipem.