16-07-08 The Tangguh plant, Indonesia's third liquefied natural gas (LNG) facility, is 93 % complete and on track to meet its 2008 production target, an official says. Amir Hamzah, spokesman for upstream oil and gas regulator BP Migas, said the contractors had only to complete several final checks at the plant.
"After we finish the checking, it will start producing LNG by the end of this year as scheduled," he said.

Tangguh is a massive project that exploits gas fields in the mountainous Bintuni Bay region in Papua. The gas fields boast proven gas reserves of 14.4 tcf.
The project operator is BP Berau, the local unit of British energy giant BP Group which also owns a 37.16 % stake in the project. The other owners are China's CNOOC (16.9 %), MI Berau (16.30 %), Nippon Oil Exploration of Japan (12.23 %), KG Berau (10 %) and LNG Japan Corporation (7.35 %).

Amir said the contractors of the plant would soon hand over gas exploration to BP once construction had been completed. However, he said the government and some of the project's foreign buyers were yet to reach an agreement on the selling price of LNG produced at the plant.
"We're negotiating for the most lucrative price, thanks to the global oil prices," he said, adding that this would help the government gain higher revenue.

Niko Karen, executive vice president of human resources and relations at BP, said he hoped the price agreement could be reached immediately.
"I expect the negotiation to be done quickly so that it will not delay our plan to export the LNG in the first quarter of next year," he told during the launch of BP's statistical review of world energy 2008. The review, which was presented by the company's chief economist Christof Ruhl, showed that the global gas prices have more than doubled from less than $ 4 per mm Btu in 2002 to more than $ 10 per mm Btu.

Tangguh will sell LNG to four overseas buyers -- China's Fujian (2.6 mm tpy), South Korean K-Power and Posco (1.11 mm tpy) and Sempra Energy on the western coast of Mexico (3.6 mm tpy).