Govt Awards BP with 20-yr PSC Extension for Tangguh LNG Operation

Indonesia has extended by 20 years a production sharing contract (PSC) with BP and its partners for Berau, Muturi, and Wiriagar working areas in West Papua, government officials and the company said on Friday. BP stated that the extension would allow the company and its partners to operate on the fields until 2055. The working areas supply to Tangguh liquefied natural gas (LNG) plant.

BP is trying to increase Tangguh's production capacity from the current 7.6 million tons per annum (MTPA) to around 11.4 MTPA by adding a new, Train-3 plant which is expected to come on stream in March 2023. "This extension reflects BP's long-term commitment to Indonesia. "It will allow us to continue to build on the great work that our team has been doing - without partners and the strong support of the government - to deliver the much-needed natural gas safely and reliably from Tangguh to Indonesia and other markets," Anja-Isabel Dotzenrath, BP Executive Vice President, Gas & Low Carbon Energy said.

Indonesia usually extends a PSC two to ten years before it expires. Chairman of Indonesia's Upstream Regulator SKK Migas Dwi Soetjipto said BP needed to secure a more extended contract to guarantee its long-term investment plan. "To maintain production for LNG Train-3, BP is committed to conducting further exploration activities at several sites. BP also committed to preparing a 2x90 MMSCFD gas pipe to support industry development in Papua," Dwi said, as quoted by Reuters.