BP talks to Chinese on Indonesian LNG venture loan

JAKARTA, Dec 12 (Reuters) BP Plc is in talks with a Chinese consortium on a $900 million loan to complete the Tangguh liquefied natural gas (LNG) project in Indonesia ande xpects to wrap up the deal next year, a company official said on Tuesday.

In August, BP signed deals with international banks for $2.6 billon in loans, part of a total of $3.5 billion in loans it needs for the $5-billion project.

BP had said previously it expected the $900 million to be in place by the end of this year.

''Our plan is to discuss and talk with a Chinese consortium on this $900 million. It is still ongoing and hopefully we can complete (the deal) to get this $900 million next year,'' BP Indonesia senior official Budiman Parhusip told reporters.

He did not say who was in the consortium.

''Project construction will not be disturbed because of our effort to get this $900 million. The project will be on schedule,'' Parhusip said.

Tangguh, in Papua at the eastern end of the Indonesian archipelago, is due to produce 7.6 million tonnes of LNG a year from two trains, with output expected from the fourth quarter of 2008.

The multi-billion dollar project has secured contracts to supply 2.6 million tonnes per year (tpy) to China over 25 years, 3.7 million tpy to the U.S. West Coast via Mexico and 1.1 million tpy to South Korea.

BP holds a 37.16 percent stake in Tangguh. The other partners include China's CNOOC , which has 16.96 percent, and several Japanese firms, including Mitsubishi Corp. , INPEX , Sumitomo Corp. and Kanematsu Corp. .

For Indonesia, the world's biggest supplier of the super-cooled gas, the Tangguh project will help offset declining output from other LNG facilities and provide much-needed revenue.

Tangguh will take gas from the Wiriagar, Muturi and Berau blocks, which together have combined reserves of 14.4 trillion cubic feet (tcf). BP is the operator of the three blocks.

The Tangguh project is about 3,000 km (1,880 miles) east of Jakarta.

Indonesia, Asia Pacific's only OPEC member, is far richer in gas than in oil.

REUTERS PV GC1515