BP okays Indonesian $7 billion project to unlock additional gas for Asia

A consortium led by the United Kingdom’s energy supermajor BP has reached a final investment decision (FID) on a project featuring enhanced gas recovery (EGR) through carbon capture, utilization, and storage (CCUS) in Indonesia.

The investment in the Tangguh Ubadari, CCUS, compression (UCC) project is expected to unlock around 3 trillion cubic feet (tcf), or 84.9 billion cubic meters (cbm), of additional gas resources. The project entails the extension of gas feed to BP’s existing liquefied natural gas (LNG) facility – Tangguh – through the development of the Ubadari gas field, whose production is anticipated to start in 2028.

Once completed, Tangguh EGR/CCUS will have three injection wells, one offshore injection platform, one offshore CO2  pipeline, and onshore facilities for CO2  removal, processing, and compression. The aim is to sequester around 15 million tonnes of CO2 in the initial phase  and potentially more considering the area’s “large CO2 storage capacity.”

BP’s chief executive officer (CEO), Murray Auchincloss, announced the FID during a meeting with Indonesian President Prabowo Subianto in London on November 22, 2024. 

“This project not only unlocks a fantastic gas resource,it also represents an Indonesian first through the use of CCUS to maximise gas recovery. BP has operated in Indonesia for more than fifty-five years, and the strength of our relationships enables us to bring deep technical experience in helping to deliver this innovative development. We deeply appreciate the continued support of the Government of Indonesia and partners and look forward to helping the region meet its growing energy needs,” said BP’s CEO.

Tangguh LNG is a unitized development of six gas fields located in the Wiriagar, Berau, and Muturi production sharing contracts (PSCs) in Bintuni Bay, Papua Barat Province. Thanks to the extension secured in late 2022, the PSC, which was about to expire in 2035, will run until 2055.

Tangguh started production in 2009, four years after its initial sanction by the Government of Indonesia, which designated it as a national strategic project. The plan of development (POD) for the project was approved in August  2021. Following the addition of the third LNG train which started operation in 2023, the plant’s total liquefaction capacity reached 11.4 million tonnes per year.

The project is operated by a consortium led by BP under a PSC with SKK Migas, Indonesia’s upstream oil and gas regulator.  The British major is the operator with a 40.22% participating interest, with partners MI Berau (16.30%) CNOOC Muturi (13.90%), Nippon Oil Exploration (Berau), (12.23%), KG Berau Petroleum (8.56%), KG Wiriagar Petroleum (1.44%), Indonesia Natural Gas Resources Muturi (7.35%).

Apart from working on projects in Asia, BP has been keeping busy in Trinidad and Tobago. The energy major’s subsidiary expanded its offshore footprint to encompass NCMA 2, a block located approximately 30 miles off Trinidad’s north coast, where the company has not undertaken any hydrocarbon exploration activities.