Indonesian upstream regulator SKK Migas expects operations at BP’s (LON:BP) Tangguh liquefied natural gas (LNG) Train 3 project, which is under construction, to start in Q2 2022.
The onshore component of the Tangguh LNG Train 3 project is now 91.2% complete, while the offshore part of the development is now 99.2% finished, SKK Migas told local media earlier this week.
Total investment at the expansion project, which will add 3.8 million tonnes per year (t/y) of LNG processing capacity, has hit $8.9 billion, according to the upstream regulator.
Construction at the project has been significantly delayed by the COVID-19 pandemic in Indonesia. But it is now predicted to be onstream in Q2 2022, said SKK Migas.
Completion of the project was previously targeted for the third quarter of 2021, which already marked a delay by one year from its planned start-up after natural disasters had disrupted logistics.
All the delays have triggered cost overruns at the expansion project and it is not yet clear who will be responsible for the resulting cost overruns. The Tangguh Train 3 expansion project comes under a cost recovery contract, meaning SKK Migas – or the government – would ultimately bear the cost, analysts at Tenggara predicted last year.
When Train 3, initially expected to cost $8 billion before any delays, eventually comes online, the total capacity at Tangguh will be 11.4 million t/y. While LNG from Train 1 and Train 2 is mostly for export, 75% of LNG from Train 3 would be supplied to state utility PLN and the remaining 25% for export to Japan’s Kansai Electric Power Company.
In August, BP and its Tangguh LNG partners confirmed that Indonesian oil and gas regulator SKK Migas has approved the plan of development (POD) for a key carbon capture utilisation and storage (CCUS) project at the Tangguh LNG export complex.