bp Indonesia LNG plant shuts down

A 3.8-million-ton liquefaction train at bp’s Tangguh LNG plant in Indonesia has been shut down for a week now due to technical problems.

Illustrative image

This is according to Upstream, which cited local media as saying the liquefaction train at the 11.4-million-ton facility had been shut down for a week now. This has not yet had an impact on global prices but if the shutdown extends, it will affect Indonesia’s exports.

The train, which is the newest one at the Tangguh facility, entered into operation last year and loaded its first cargo in October 2023. The start was delayed by several years because of the pandemic lockdowns. The original Tangguh LNG plant started operations in 2009.

The LNG produced at the facility is delivered to Indonesia’s state-owned power generation company PLN. Tangguh is the largest producing LNG project in the country.

Indonesia is one of the largest LNG producers in the world, with 2023 export volumes topping 16.2 million tons. It also has expansion plans for its LNG industry. Earlier this year, the Indonesian government approved a plan by Japan’s INPEX for the development of a long-delayed LNG project in eastern Indonesia.

Separately, a new offshore gas discovery in the country sparked hopes for a shelved project that could have 12.5 million tons annually in capacity if it gets the green light from its investors.

Shell recently said in its LNG Outlook that demand for liquefied gas could surge by over 50% by 2040c, citing an accelerating shift from coal to gas in Asia and increased use of gas for powering local economies.

China will lead the demand growth trend, the company said, but Asia as a whole will also be a major driver. This makes BP and others operating LNG capacity in Indonesia well-placed to take advantage of the forecast demand growth.