Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date 28 Aug 2006
PDS Updated as of 19 Sep 2013

Project Name INO: TANGGUH LNG PROJECT
Borrower/Equity Investment Name HSBC BANK USA, NATIONAL ASSOCIATION
Country Indonesia
Project/Program Number 38919-014
Status Approved
Geographical Location Irian Jaya Barat, Indonesia.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector and/or Subsector Classification Energy
/ Conventional Energy
Thematic Classification Economic growth
Environmental sustainability
Private sector development
Gender Mainstreaming Categories

Project Sponsors

Bp Plc
China National Offshore Oil Corp.

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
PS7224Private Sector Loan
(Fully Disbursed)
350,000
TOTAL USD 350,000

Summary of Environmental and Social Issues

Key environmental issues include the need to protect air and water quality, and effects on terrestrial, freshwater aquatic, intertidal, and marine ecosystems. Extensive and intensive environmental inputs were included in project planning. The Project, as designed, minimizes the risk of adverse environmental impacts. A wide range of environmental protection measures and safeguards have been incorporated to protect against adverse impacts to the physical, biological, and social components of the environment. The siting of the plant required the resettlement of 127 families from Tanah Merah village. An Integrated Social Program (ISP) (the equivalent of an Indigenous Peoples Development Plan) was prepared to address anticipated indigenous peoples' (IP) issues and other social development issues during project construction period and transition to the project operations period (2006-2010). The second phase (ISP 2) (2011-2015) has already started implementation which continues to address well-being of villages in project areas as well as address poverty at local community level and among IPs and other vulnerable groups. An Indigenous Peoples Development Framework (IPDF) was also prepared to address unanticipated IP issues and other possible social development issues over the lifetime of the Project. An IPDF is required in recognition that the project lifespan and project loan maturity extends beyond the current ISP planning period, and the long-term socio-economic environment, in which the project is being developed, is relatively unpredictable.

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

BP, as operator, maintains an ongoing dialogue with the people who are directly and indirectly affected by the project in order to understand the impact and become more aware of the risks the external environment present. There is regular and transparent communication with stakeholders, including the government, nongovernment organizations, and local communities. Robust frameworks for internal and external audit and monitoring are in effect, which include audits by the Ministry of Environment and the independent External Panel. The Tangguh Independent Advisory Panel (TIAP) also regularly conducts stakeholder meetings.

During Project Design
During Project Implementation

Description

The Project, which is located in Irian Jaya Barat, Indonesia, is to develop, build and operate gas production wells, platforms and a liquefied natural gas (LNG) facility to export gas initially to the People's Republic of China (PRC), Korea and the West Coast of North America. The LNG facility will initially consist of two "trains" (equipment units that purify and liquefy gas) with name-plate capacity of 7.6 million metric tons per annum of LNG.1

Objectives and Scope

The Project is critical for Indonesia in its energy development and export efforts and will help Indonesia maintain its position globally as a key LNG export centre. The Project is in accordance with the government policy of maintaining security of LNG supply and encouraging the development of foreign-exchange earning projects. It is also in line with ADB's energy policy that emphasizes support for the development of cleaner fuels with the private sector participation and will provide environmentally benign LNG to support the sustainable economic growth and promote usage of cleaner fuel in the region especially in PRC and Korea. ADB's participation will catalyze significant amount of long-term debt to support Indonesia's energy sector. Since the Project is ADB's first private sector project in Indonesia's oil and gas sector, it has the potential to provide significant demonstration impacts for subsequent projects not only in Indonesia but also in the region.

Project Rationale and Linkage to Country/Regional Strategy

The Project supports and contributes to the promotion of ADB's operational priorities, particularly (i) generating substantial financial benefits for both the central and local governments to enable sustainable economic growth, which can reduce poverty, as well as directly assisting various poverty reduction initiatives in Irian Jaya Barat; (ii) supporting government policy of restructuring the oil and gas subsector with the largest private sector investment since the financial crisis in 1997; (iii) supplying clean energy to countries in the region, e.g., PRC, where serious environmental degradation including acid rain have resulted from the overuse of coal as a primary fuel; and (iv) promoting regional cooperation through increased energy trade in the region.

Outputs and Implementation Progress

Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Status of Development Objectives
The Project has had major positive impact and demonstration effect on private sector development on international, national, and local levels in relation to its stated development objectives. The project contributed to the resumption of the private sector s confidence in Indonesia. The project also contributed to maintaining Indonesia s key position in the global LNG market. The project provided Indonesia with new LNG production and export capacity and contributed to economic growth by bringing additional revenue to the national and local governments. The project has contributed to inclusive growth by creating thousands of jobs and work opportunities locally as well as improving local expertise. The Project has set new standards in environmental and social risk assessment and rigorous environmental, social, health, and safety management for sustainable resource development in partnership with key stakeholders that include the local community. It was the first oil and gas company in Indonesia to conduct public consultation with the local communities and government during the AMDAL (environmental and social impact assessment) development process. Its lessons learned and best practices are shared with the industry as well as the Indonesian government for replication in its future oil and gas projects. In addition, it has promoted the use of clean energy through increasing natural gas supply to key industry users globally. As the first extractive operation established in Indonesia s least-developed province, it serves as a model for the industry as well as the government by demonstrating new standards and practices for sustainable clean energy development with a rigorous and systematic approach to operational integrity, governance, safety, and risk management.
Material Changes

Business Opportunities

Date of First Listing
Consulting Services
Procurement
Procurement and Consulting Notices
http://www.adb.org/projects/38919-014/business-opportunities

Timetable

Concept Clearance 18 Jun 2004
Fact-finding
Management Review Meeting 28 Oct 2005
Approval 14 Dec 2005
Last Review Mission 11 Dec 2004 to 16 Aug 2005

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Private Sector 7224 14 Dec 2005 31 Jul 2006 31 Jul 2006 15 Nov 2009

Contacts and Update Details

Responsible ADB Officer Masayuki Kanda (mkanda@adb.org)
Responsible ADB Department Private Sector Operations Department
Responsible ADB Divisions Infrastructure Finance Division 1
Executing Agencies

Links

Project Website http://www.adb.org/projects/38919-014/main
List of Project Documents http://www.adb.org/projects/38919-014/documents