U.K. based energy giant BP Plc (BP) has inked a Memorandum of Understanding (MoU) with Indonesia’s state electricity company – PT.PLN (Persero) – to make liquefied natural gas (LNG) available on a long-term basis.
The supply of LNG is meant for domestic Indonesian requirements as well as to support PLN in providing electricity to Teluk Bintuni Regency, Papua Barat province. The signing of the MoU is part of the growth plan for the Tangguh LNG project in Papua Barat province, Indonesia.
BP has been present in Indonesia since the last 35 years and is among the largest foreign investors in the country. Its main operations in the region comprise exploration and production. Tangguh LNG operations in Papua Barat province is a key project for the company that came online in mid-2009.
The MoU bears evidence of BP aims to work closely with PLN and win supply contracts for LNG for usage in the domestic power plant, electricity to meet local demand and requirement in small and medium-sized enterprises in Teluk Bintuni Regency and adjoining areas.
The agreement supports BP’s goal of developing the Papua Barat economy and trying to make energy available to the whole of Indonesia taking into consideration the needs of all key stakeholders.
BP is the operator of Tangguh with a 37.16% interest and also serves as the contractor to BPMIGAS. The other partners in the Tangguh project are MI Berau B.V., CNOOC Limited (CEO), Nippon Oil Exploration (Berau), Ltd., KG Berau/KG Wiriagar, LNG Japan Corporation and Talisman having holdings of 16.3%, 13.9%, 12.23%, 10%, 7.35% and 3.06%, respectively.
BP holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation on the stock.
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