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BP LNG Tangguh

The  Tangguh gas field  is a gas field lies in  Bintuni Bay , in the province of  West PapuaIndonesia . The  natural gas field  contains over 500  billion  cubic meters  (18  trillion  cubic feet ) of proven  natural gas  reserves, with estimates of potential reserves reaching over 800 billion cubic meters (28 trillion cubic feet).

The Tangguh field is developed by a consortium of international companies, led by  BP  (37% stake),  CNOOC  (17%), and  Mitsubishi Corporation  (16.3%). Smaller partners include the Japanese companies  Nippon EnergyKanematsuSumitomo , and  Nissho Iwai .

Production began in June 2009, but 0% for local Indigenous Peoples of West Papua.

Natural gas extracted from the field will be liquefied and the resulting  LNG  transported to Asian customers, mostly in  ChinaSouth KoreaJapan . The project is expected to allow Indonesia to keep a significant share of the world LNG market, compensating the progressive phase-out of the Arun terminal in Sumatra, whose reserves are largely depleted.

 

 

Financiers for the BP-operated project reportedly include the Japan Bank for International Cooperation, a Chinese bank consortium and the Asian Development Bank, which issued a press release Tuesday confirming it had signed a $ 350 million loan to help develop the project.

Last year, BP said it was looking to source around $ 3.4 billion in finance for the project, according to  Reuters , while the total cost of developing the project, including upstream developments and two LNG trains, has previously been put at around $ 5.5 billion .

Tangguh is expected to produce 7.6 million tonnes of LNG per year with production set to begin in the fourth quarter of 2008 while sales contracts with China, Mexico and South Korea have already been signed.

Chinese state-owned energy company CNOOC, which has a 17% stake in the project, has signed up for 2.6Mt per year for 25 years while South Korea's Posco and K-Power have signed up for 600,000t and Mexico's Sempra Energy has signed up for 3.7Mt.

BPMigas chief Kardaya Warnika told  Reuters  a formal decision from the Indonesian Government with regards to the price of LNG to be supplied to CNOOC, China's third-largest oil company, was yet to be made. BPMigas is Indonesia's oil and gas regulator. 

Last month, Warnika reportedly said the Government had agreed to raise the price of LNG sold to CNOOC to an oil equivalent of $ 38 a barrel, up from the previous $ 25 / bbl level.

Other equity partners in the Tangguh project include several Japanese firms such as Mitsubishi, Inpex, Sumitomo and Kanematsu.

Tangguh will source gas from the Wiriagar, Muturi and Berau blocks, which together have combined reserves of 14.4 trillion cubic feet of gas. BP is the operator of the three blocks.

 

 

Rombebai 
 
AED is focused on the interpretation of 2D seismic over the large Gesa structure following completion of the acquisition of the Rombebai Contract Area. Initial planning for drilling the Kare 1 exploration well on the Gesa structure during late 2010/2011 has commenced and the Gesa structure has the potential to be a world class resource. Drilling and development of the project will be a significant undertaking and AED has decided to seek a joint venture partner in the assessment and development of this project. 
 
A number of parties have expressed interest in Gesa and a formal process of farm ‐ out will commence shortly.  
 
Investment Highlights 
 
The recent acquisition means AED has an interest in a highly prospective oil and gas exploration asset in Indonesia. Key investment highlights include: 
 
• Ready to drill Gesa structure with potential in ‐ place prospect resource of 5‐20 Tcf 
 
• First Gesa well (Kare ‐ 1) intended to be spudded in late 2010 / early 2011 
 
• World scale LNG development potential 
 
• Located in the region of major gas discoveries such as the Tangguh LNG development 
 
• License area of ​​5,795 sq km with 225 km's of 2D seismic obtained in 2007 

 

Figure 1: Location Map – Rombebai Figure 1: Location Map – Rombebai 

GESA 
 
The Gesa structure is the primary drilling target within the Contract Area. Both Gesa 1 and Gesa 2, which were drilled in the late 1950's, encountered numerous gas shows. These wells were prematurely plugged and abandoned due to over ‐ pressuring. 
 
Recent seismic interpretation of the 2007 data shows a significant seismic marker that is thought to represent a potential reservoir section occurring immediately below the over ‐ ressured gas shows. This recent seismic indicates that these wells reached TD prior to intersecting the prominent seismic event (Figure 2). 
 
The seismic marker is interpreted to represent the upper of three slope fans that are associated with major sea level falls during the Pliocene (Figure 3). Mapping the primary objective shows a large structure having an area of ​​closure of approximately 175 sq kms. The Kare 1 well is planned to intersect the uppermost slope fan and would be drilled to immediately below the mapped closure for this horizon. 

 Figure 2: Seismic line (2007) through GESA wellsFigure 2: Seismic line (2007) through GESA wells

Figure 3: Target Reservoir Sections Figure 3: Target Reservoir Sections