JOGMEC, JBIC step in with Tangguh support

11 August 2016, Week 31 Issue 430

Japan Oil, Gas and Metals National Corp. (JOGMEC) said last week it had signed loan guarantee agreements supporting Japanese companies in the development of a third train at Tangguh, in Indonesia. An FID was taken on the construction of the extra train on July 1. 

JOGMEC estimated the loan guarantee was US$416 million. Supporting the third train was in line with JOGMEC’s “technical, political and business related criteria”, it said, and construction would help “reinforce the stable [supply of LNG] to Japan”.

The Tangguh LNG project is led by BP, with a 37.16% stake. Other partners in the project include MI Berau with 16.3%, CNOOC Muturi with 13.9%, Nippon Oil Exploration (Berau) with 12.23%, KG Berau Petroleum with 8.56%, Indonesia Natural Gas Resources Muturi with 7.35%, Talisman Wiriagar Overseas with 3.06% and KG Wiriagar Petroleum with 1.44%. 

JOGMEC has stakes in three companies working on the project. It has a 49% holding in Nippon Oil Exploration (Berau), 9.2% in KG Berau Petroleum and 59.9% in KG Wiriagar Petroleum. In 2009, JOGMEC provided an estimated US$200 million loan guarantee to support Nippon Oil Exploration’s 4.7% stake in the ExxonMobil-led Papua New Guinea LNG. The Japanese institution also provided a US$2 billion completion guarantee to the Inpex-led Ichthys LNG project in 2012. 

 

JBIC

The Japan Bank for International Co-operation (JBIC) said it had struck a loan agreement worth up to US$1.2 billion, on August 2. 

The Japanese bank said it had supported the project on the basis of strengthening ties with Indonesia, which is the top provider of LNG to Japan. As such, it helps “to secure a stable supply of energy resources to Japan”.

Indonesia is under pressure to increase supplies to its domestic market, JBIC said, and the bank is “committed to supporting” this plan. 

Of Train 3’s production, 75% has been contracted to Indonesia’s state-owned power company, PT PLN (Persero). The remaining 25% has been contracted to Japan’s Kansai Electric Power.

The third train will have 3.8 million tonnes per year of capacity, at the plant in Indonesia’s Papua Barat. Initial production began in 2009, with the first two trains providing 7.6 million tonnes per year. The new phase also includes two offshore platforms, 13 new production wells, a new jetty and supporting infrastructure. Production should start in 2020. 

EPC contracts are expected in the third quarter, with construction to follow.