bp, along with its Tangguh production sharing contract partners, has approved a $7 billion investment in the Tangguh Ubadari CCUS Compression (UCC) project in Papua Barat, Indonesia.
bp and Partners is expected to unlock approximately 3 trillion cubic feet of gas resources, bolstering Asia’s growing energy demand.
Project Details
The Tangguh UCC project includes three major components:
*Development of the Ubadari Gas Field: Production is expected to commence in 2028.
*Carbon Capture, Utilization, and Storage (CCUS): A groundbreaking move for Indonesia, this technology will enhance gas recovery while sequestering around 15 million tonnes of CO2 emissions in its first phase.
* Onshore Compression Expansion: This leverages existing infrastructure at the Tangguh LNG facility, which now has a total liquefaction capacity of 11.4 million tonnes per year, following the addition of a third LNG train in 2023.
Collaboration with Indonesia
bp and Partners CEO Murray Auchincloss announced the decision during a meeting with Indonesian President H.E. Prabowo Subianto in London.
He stated, “The project not only unlocks a fantastic gas resource but also represents Indonesia’s first large-scale use of CCUS to maximize gas recovery. Our long-standing relationship with Indonesia, built over 55 years, allows us to bring deep technical expertise to this innovative development. We are grateful for the government’s continued support and look forward to contributing to the region’s growing energy needs”.
Strategic Importance
Designated as a National Strategic Project by the Indonesian government, the Tangguh UCC project underlines bp’s confidence in Indonesia’s favourable investment climate.
The investment reflects bp’s focus on value, returns, and meeting regional energy demands, with the Tangguh LNG facility strategically positioned to serve high-value markets across Asia.
Supporting Indonesia’s Energy Transition
The Tangguh CCUS project marks a significant milestone for Indonesia as its first large-scale carbon sequestration initiative.
By incorporating CCUS technology, bp aligns with global efforts to reduce emissions while maximizing energy production.
Financial Discipline and Regional Focus
The $7 billion investment adheres to bp’s strict financial return criteria and disciplined framework.
It highlights bp’s commitment to balancing economic growth with environmental stewardship. This reinforces its role as a key energy partner for Indonesia and the broader region.
As per the press release, the landmark project marks a pivotal step in addressing Asia’s growing energy demand. It also sets a benchmark for innovative and sustainable gas production in Indonesia.
