The Indonesian government has approved a plan to expand the Tangguh liquefied natural gas project operated by BP PLC (BP), the company said Friday.

The plan calls for building a third liquefaction train at Tangguh, located in far eastern West Papua province, at an estimated cost of $12 billion.

"Approval of the plan is an important step in preparation for the final investment decision for this expansion, which is currently expected to be taken in 2014. This would potentially enable commissioning operations for the new train to begin in late 2018," BP Indonesia said in a statement.

The third train would add liquefaction capacity of 3.8 million metric tons a year to Tangguh, bringing its total capacity to 11.4 million tons, it said.

BP and its partners will sell 40% of the LNG produced with the third train to Indonesian buyers such as state-owned electricity company PT Perusahaan Negara, and the rest to buyers in the Asian-Pacific region.

BP holds a 37.16% stake in the project. Its partners include Cnooc Ltd. with 13.90%; Nippon Oil Exploration (Berau) Ltd., with 12.23%; and LNG Japan Corporation, with 7.35%.

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