Indonesia: Tangguh Liquefied Natural Gas Expansion Project
|Project Name||Tangguh Liquefied Natural Gas Expansion Project|
|Borrower / Company||HSBC BANK USA, NATIONAL ASSOCIATION
|Country / Economy||Indonesia
|Type or Modality of Assistance||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Partnerships
Private sector development
|Sector / Subsector||
Energy / Conventional energy generation
|Gender Equity and Mainstreaming||Some gender elements|
|Responsible ADB Department||Private Sector Operations Department|
|Responsible ADB Division||Portfolio Management Division, PSOD|
|Responsible ADB Officer||Nath, Kiron|
|Project Sponsor(s)||BP Plc
Japan Oil Gas and Metals National Corporation
JX Nippon Oil & Gas Exploration Corporation
MITSUI & CO.
|Objectives and Scope||The Tangguh expansion will provide much needed natural gas to meet domestic demand that has increased considerably in the last decade. The project will support the development of a more sustainable fuel mix and government efforts to reduce carbon emissions. On a local level, the proposed project will accelerate economic development for West Papua, providing additional local employment opportunities and scope for human resource development.|
|Status of Operation/Construction||Construction of the Tangguh LNG expansion project is ongoing.|
|Linkage to Country/Regional Strategy||The Tangguh expansion aligns with Strategy 2020 and ADB Energy Policy (2009) by promoting environmentally sustainable growth through the expansion of LNG infrastructure and domestic gas supply, which has strong potential to offset greenhouse gas emissions generated by coal-fired power stations. The project is also consistent with Strategy 2020 Mid-Term Review's recommendations and the Interim 2015 Country Partnership Strategy for Indonesia through its increased emphasis on energy security and domestic fuel mix diversification, as well as prioritization of investment in less-developed Eastern Indonesia.|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||Key environmental issues identified during the greenfield development of Tangguh include the need to protect air and water quality, and effects on terrestrial, freshwater aquatic, intertidal, and marine ecosystems. The original project planning included careful environmental management based on the inputs required by the Indonesian law, as well as ADB's safeguard requirements. The Project was designed to minimize 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 Tangguh Expansion is expected to follow the same philosophy of careful environmental planning and abiding to the current Indonesian law and ADB's revised safeguard requirements. An EIA including EMP is going to be developed and will revisit the key environmental issues identified above. ADB participation in the project is seen as critical to ensure these high standards.|
|Involuntary Resettlement||Construction of the LNG plant site required the acquisition of 3,266 hectares of land from several clans of the Simuri tribe, which held customary (adat) rights to the land and physical relocation of 122 households into two host communities, Onar (28 households), and Saengga (94 households). The host villages benefitted of housing renovation and infrastructure and livelihood and community development programs by the project. All villagers have experienced some loss of access to fishing area as a result of restrictions around the LNG plant, subsea pipelines and offshore platforms. The project implemented a benefits-sharing mechanism that goes beyond a one-off compensation payment to offer revenue streams to those clans losing resources. The Tangguh Expansion is expected to have no further land acquisition and resettlement. However, due diligence is required to determine whether BP's efforts to enhance and diversify the livelihood sources of the resettled community have been successful.|
|Indigenous Peoples||During the greenfield development, two main ethnic groups, the Sebyar and Simuri, were identified in the project area and indigenous peoples development plan in the form of an Integrated Social Program (ISP) was prepared and implemented in accordance with ADB's Indigenous Peoples Policy (1998). Due diligence will assess the Tangguh Expansion impact on indigenous people, the extent to which various programs under the ISP Phase 2 have improved the well-being of villages in the project areas. Based on the outcome of the assessment, an Indigenous People Plan in the form of an ISP will be prepared based on ADB Safeguard Policy Statement (2009).|
|Stakeholder Communication, Participation, and Consultation||Stakeholder consultation process was undertaken by the project during the development of environment and social impact assessment in order to comply with ADB's Safeguard Policy Statement requirements.|
|Timetable for assistance design, processing and implementation|
|Concept Clearance||22 Jun 2015|
|Credit Committee Meeting||25 Oct 2016|
|Approval||01 Dec 2016|
|Last PDS Update||07 Feb 2022|
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.
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|Title||Document Type||Document Date|
|Tangguh Liquefied Natural Gas Expansion Project: Report and Recommendation of the President||Reports and Recommendations of the President||Nov 2016|
|Tangguh Liquefied Natural Gas Expansion Project: Initial Poverty and Social Analysis||Initial Poverty and Social Analysis||Oct 2016|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
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ADB $400 Million Loan to Help Indonesia Meet Energy DemandADB has signed a $400 million loan to help expand the Tangguh liquefied natural gas (LNG) production facility, one of the largest in Indonesia.