BP secures 20-year production sharing contract extension for Indonesian LNG project

UK-based energy giant BP and the Government of Indonesia have concluded a 20-year extension of the Tangguh production sharing contract (Tangguh PSC), enabling BP to further develop the largest gas-producing field in Indonesia.

Courtesy of BP
Courtesy of BP

On 23 December, BP announced that the Indonesian government granted the extension to BP, operator of the PSC, and its Tangguh PSC partners.

The Tangguh PSC, which consists of the Berau, Muturi and Wiriagar PSCs and was due to expire in 2035, will now be extended to 2055.

Anja-Isabel Dotzenrath, BP’s EVP of Gas & Low Carbon Energy, 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. Today’s agreement will help open new possibilities for Tangguh’s future.”

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Kathy Wu, BP’s regional President of Asia Pacific, Gas & Low Carbon Energy, added: “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.

“With our recent addition of other blocks in Indonesia, this also reflects our confidence in the Government of Indonesia as we continue to invest and deliver energy solutions.”

The Tangguh LNG project in Papua Barat province, Indonesia, began operations in 2009 and has delivered more than 1,450 cargoes of LNG to both local and international markets. Its two LNG production trains have a combined liquefaction capacity of 7.6 million tonnes of LNG a year, and a third train currently under construction is expected to come online next year, increasing Tangguh’s production capacity by circa 50%.

In addition to Tangguh’s third train, BP and its partners are planning the Tangguh UCC project, for which the Government of Indonesia approved a plan of development in 2021.

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The project comprises the development of the Ubadari gas field, enhanced gas recovery through carbon capture, utilisation and storage (EGR/CCUS) in the Vorwata field, and onshore compression.

BP’s partners in the Tangguh PSC are MI Berau B.V., CNOOC Muturi Ltd., Nippon Oil Exploration (Berau) Ltd., KG Berau Petroleum Ltd., KG Wiriagar Petroleum Ltd., and Indonesia Natural Gas Resources Muturi Inc.

Beyond Tangguh LNG in Indonesia, BP has interests in the Andaman II block offshore Aceh and has recently signed new PSCs for Agung I and Agung II blocks.

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