LNG Japan grabs insurance for Tangguh LNG expansion project

Nippon Export and Investment Insurance said it will provide insurance for LNG Japan Corporation’s debt guarantees for the Tangguh LNG expansion project in Indonesia. 

Together with other Japanese partners, Japan LNG holds 46 percent interest in the project, NEXI said in its statement on Monday.

About 25 percent of the liquefied natural gas produced at the third train will be delivered to the Japanese utility, Kansai Electric Power, the statement reads.

The insurance with an approximate tenor of 13 years, will cover political risk losses suffered by LNG Japan in guaranteeing loans provided by commercial banks, including Japanese banks, to finance the Tangguh expansion project.

In August, the project operator, BP and SKKMigas, Indonesia’s upstream oil & gas regulator, signed a loan deal worth US$3.74 billion with a consortium of international and Indonesian banks to fund the construction of the third liquefaction train at the Tangguh LNG export facility in Papua Barat Province.

In addition, the Japan Bank for International Cooperation (JBIC) is providing around US$1.2 billion in financing for the expansion.

The existing Tangguh LNG facilities are producing 7.6 million tons of LNG per annum. The third liquefaction train will add 3.8 million tons of annual production capacity.

The final investment decision to build a third train at the facility has been reached in July and the first LNG from the new train is expected in 2020.

Besides BP, the project operator with a 37.16% stake, other partners in the Tangguh production sharing contract are MI Berau (16.30%), CNOOC Muturi (13.90%), Nippon Oil Exploration (Berau) (12.23%), KG Berau Petroleum and KG Wiriagar Petroleum Ltd (10.00%), Indonesia Natural Gas Resources Muturi (7.35%), and Talisman Wiriagar Overseas (3.06%).

LNG World News Staff