Tangguh LNG for Korea’s private sector
Posted: 14 August 2003
BP announced the Tangguh liquefied natural gas (LNG) project in
Indonesia has been selected as the preferred supplier of LNG to
two South Korean companies — SK Power Company Limited, and
POSCO — in what is the world's fastest growing LNG market.
POSCO, the world's second largest steel maker, and SK Power —
100 per cent owned by SK Corporation (SK Corp), South Korea's largest
oil refiner — announced the outcome of bidding for the supply
of up to 1.35 million tonnes per annum of LNG annually, for a 20-year
term starting in 2005. The bid process to purchase LNG is the first
undertaken by Korea's private sector
POSCO is currently building an LNG terminal at Gwangyang in South
Korea that will re-gasify the LNG to be supplied. POSCO has two
gas-fired power plants with a total generating capacity of 845MW
at their steel mills in Pohang (345MW) and Gwangyang (500MW), while
SK will construct a 1080MW power station at Gwangyang.
Ralph Alexander, chief executive of BP's Gas, Power & Renewables
business, said: "Korea is an important gas market and with
our partners in the Tangguh project we are pleased to have been
selected as the preferred supplier to SK and POSCO. We believe an
ability to offer highly competitive, flexible LNG to the marketplace
is a critical and distinctive feature of our offer. We now look
forward to entering detailed negotiations with SK and Posco to reach
agreement on supply and purchase contracts over the next few months."
The Tangguh project's bid was chosen in competition with five other
international LNG supply sources. The Tangguh Project is targeting
a two-train start-up development. The project has already secured
an LNG sales contract for 2.6 million tonnes per annum for the Fujian
LNG project in China commencing in 2007.
The Tangguh LNG project is located in the Berau-Bintuni Bay region
of Teluk Bintuni Regency, in the Indonesian province of Papua
(formerly called Irian Jaya). The project is operated by BP Indonesia,
who hold a 37.16 per cent stake in the project, as a PSC contractor to
the regulator, BPMIGAS. - BP's partners in the Tangguh Project are MI Berau B.V (held
by Mitsubishi Corporation and INPEX Corporation) (16.30 per cent); CNOOC
Ltd. (12.50 per cent); Nippon Oil Exploration Berau (12.23 per cent); BG Group
(10.73 per cent); KG Companies (held by Japan National Oil Corporation,
Kanematsu Corporation and Overseas Petroleum Corporation (10.0 per cent);
and LNG Japan Corporation (held by Nissho Iwai Corporation and
Sumitomo Corporation) (1.07 per cent).
- The Tangguh gas fields contain 14.4 tcf of proved and certified
natural gas reserves. The planned LNG processing plant will be
able to produce seven million tonnes of LNG per annum from two
initial processing trains
Posted by Richard Price,
Editor Pipeline Magazine
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