Mutual benefit: how a gas plant in Indonesia is building connections with local communities

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Why is BP's Tangguh gas facility making a difference?

Last edited: 19 October 2016

In the decade since its construction, BP’s vast liquefied natural gas plant in a remote part of Indonesia has not only provided a vital source of energy for the country, but also helped to make a difference to local healthcare, employment and literacy levels

BP’s Tangguh LNG plant sits on the southern shore of Teluk Bintuni in the Papua Barat Province of Indonesia, a seven-hour flight from the capital, Jakarta. It’s in this remote location at the edge of a rainforest that the plant has, over the past decade, become a central part of the community.

To see just how well Tangguh has become integral to daily life in Papua Barat, you only have to look around BP’s giant LNG plant. The Indonesian workforce is more than half Papuan. Many of the uniforms they wear are made locally, by women such as Yokibet Sorowat, once a housewife and now a fully trained sewing machine operator. And when the Tangguh team sits down to eat makan siang, locally farmed fruits and vegetables are on the lunchtime menu, along with seafood caught by fishermen from the nearby village of Arguni.

BP initiatives bring local benefits

Outside the plant, monthly household incomes in the local communities have risen, children are spending longer in school (an average of 7.4 years per child in 2013, compared with 4.2 years in 2007), and malaria no longer holds the same menace for pregnant women and babies.

These are all examples of initiatives started by BP.

“We believe the best way for BP to achieve sustainable success is by acting in the long-term interests of our stakeholders, our partners and society,” says BP Indonesia head of country, Dharmawan Samsu. “And, that the communities around our operations should benefit from our presence.”

The prosperity of the communities around Tangguh is set to rise further with BP’s plans to build a third liquefied natural gas (LNG) processing train at the site, increasing the plant’s production capacity by 50%. The announcement in July 2016 of the final investment decision on the new train - as well as two offshore platforms, an expanded LNG loading facility and other supporting infrastructure - makes it the largest upstream project in Indonesia.

The $8 billion new investment will create 10,000 jobs, including more than 2,300 temporary jobs for Papuans, added to the already 55% Papuan workforce at Tangguh.

Supporting local development

Train 3 will also further support local development, and help to meet the growing needs of the world’s fourth most populous country, where energy consumption has doubled in the past 15 years. Some 75% of the project’s annual LNG production is contracted to the Indonesian state electricity company, PT PLN (Persero), and a portion of the gas from the new train is committed for the electrification of Papua Barat Province. Tangguh, working with PLN, has already brought electricity to surrounding villages.

With Tangguh’s LNG generating four megawatts (MW) of electricity for Teluk Bintuni Regency, the community is less dependent on high-cost, diesel-fuelled power plants. A technical evaluation is under way for the supply of a further 4MW of electricity to PLN.

“Tangguh has a long-standing, positive relationship with the community surrounding its operations and has earned the reputation as a trusted partner,” says Christina Verchere, BP regional president for Asia Pacific. “Over the past decade, we have worked together with local stakeholders to eliminate malaria, increase literacy and household income levels, and to develop local indigenous businesses. The Tangguh Expansion Project will bring additional social and economic benefits to the people of Papua Barat Province and Indonesia.”

During the planning for the expansion of Tangguh, public consultation meetings were held with representatives from 62 local villages to discuss their views, concerns and aspirations. In 2014, the findings were used to update BP’s approach to community relations, health, education and livelihoods.

As the Tangguh Expansion Project progresses, BP continues its support of these social programmes...

Papuan apprentices

This year, BP Indonesia introduced the first internationally accredited Papuan Apprentice Programme to train BP’s operations and maintenance technicians.

Forty apprentices were selected from more than 250 applicants, with women making up nearly half of those successful and four out of five being indigenous Papuans, mostly from the villages around the BP-operated Tangguh LNG site.

During the three-year programme, apprentices such as Novita O.K. learn English and strengthen their maths and science skills; become familiar with BP’s values and behaviours, ‘control of work’ procedures and HSE policies; attain international certification in their core technical discipline; and undergo competency assessments prior to working at Tangguh.

Arno Appel, vice president of operations, says: “This programme is key to the sustainability of safe, reliable, compliant operations at Tangguh, while also honouring our commitment to employing the local population.”

Supplying food to the plant

It took nearly 11,000 workers to build the gas plant at Bintuni Bay. When the work was completed in 2009, some 2,000 roles in construction that had been filled by locals were no longer needed.

Hidayat Alhamid, senior external affairs officer, says: “Having spent some time working for a global company, many of the workers were reluctant to go back to their previous lives of farming or fishing, earning less money and with tougher working conditions.”

The community relations team at Tangguh came up with the idea of setting up food cooperatives in nearby villages to feed Tangguh’s 1,500 workers. There are now seven such cooperatives, supplying fruit and vegetables and organic fresh seafood, and they have transformed the lives of everyone involved.

One example is the Mayri Cooperative, in Teluk Bintuni and Fakfak Regencies, whose business development is supported by Tangguh. The cooperative, owned and managed by indigenous people living in the village, now owns a minimarket and a collection point for fish and vegetables, which are then supplied to Tangguh.

One example is the Mayri Cooperative, in Teluk Bintuni Regency, whose business development is supported by Tangguh. The cooperative, owned and managed by indigenous people living in the village, now owns a minimarket and a collection point for fish and vegetables, which are then supplied to Tangguh.

In the spotlight: Tangguh operations

Tangguh LNG is BP’s main business in Indonesia. It is the second-largest LNG supply facility in Indonesia and is a fully-integrated operation, producing and processing natural gas from the Papua Barat Province and delivering it as LNG to customers in China, Japan, South Korea and Indonesia.

The current operation consists of two LNG trains with a combined production capacity of 7.6 million metric tonnes a year. The Tangguh Expansion Project will add a new LNG processing train, which will extend the plant capacity to 11.4 million metric tonnes.

Currently, Tangguh loads an LNG cargo of about 148,000 cubic metres every three days, with one cargo able to power 200,000 Indonesian houses for a year.

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