Indonesia's Tangguh LNG train 2 resumes production -BP

JAKARTA Mon Dec 10, 2012 4:47am EST

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JAKARTA Dec 10 (Reuters) - Indonesia's Tangguh liquefied natural gas (LNG) project Train 2 has resumed production after a fire forced operator BP to shut it down in mid-November, the oil and gas giant said in an emailed statement on Monday.

Indonesia, the world's third-largest exporter of LNG, stepping up use of natural gas at home to avoid costly imports and to meet rising demand and expects shipments to drop around 14 percent next year as production volumes decline.

The Tangguh outage resulted in the cancellation of at least 2 spot cargoes totalling 120,000 tonnes that were to have been shipped to South Korea.

"LNG production resumed on Saturday at 5 a.m., and is now ramping up to design capacity," BP Regional President Asia Pacific William Lin said in a statement, adding that an investigation into the root cause of the fire had been completed.

Tangguh Train 2 is now "stabilizing production" and will soon reach its designated production level of 3.8 million tonnes per year (mtpa), Hadi Prasetyo, a spokesman for Indonesia's upstream oil and gas regulator (SKMigas), said.

The Tangguh field, situated in West Papua province, is operated by a consortium of companies led by BP, along with China's top offshore oil and gas producer CNOOC and Japan's Mitsubishi Corporation, Sumitomo Corporation and Kanematsu Corporation.

A planned third Tangguh LNG train, which still requires a Final Investment Decision (FID) from the British oil company, is expected to add 3.8 million tonnes per annum (mtpa) liquefaction capacity to Tangguh, 40 percent of which will be set aside for Indonesian state power company PT PLN.

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