Indonesia awards EPCI contracts for Muara Bakau gas

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SKK Migas, Indonesia’s upstream oil and gas task force, has awarded engineering, procurement, construction and installation (EPCI) contracts for two natural gas and condensate fields in the Muara Bakau Block, located off the coast of East Kalimantan. The project is the first real progress that Indonesia has made in developing deep-water gas resources.

“Following the award of the EPCI project for both fields, development worth $4.1 billion will be commencing very soon,” said the task force’s acting chairman, Johannes Widjonarko.

The Jangkrik and Jangkrik North East fields are operated by Italian oil and gas major Eni, which has a 55% interest in the project; GDF Suez holds the remaining interest. Gas from the fields will help to meet demand for electricity generation and industry in East Kalimantan, Java, South Sumatera, Central Sumatera, North Sumatera, and Aceh. Gas will be supplied both as LNG and by pipeline, as appropriate.

“Both fields are expected to start producing in early 2017 with peak production of 450 MMcf/d for six years,” said Widjonarko. Output is then expected to decline naturally over the remainder of the total production period of 14 years. Development of the fields is expected to generate state revenues of $5 billion, or more than Rp 50 trillion.

Domestic allocation: The plan of development (POD) for the Jangkrik Field was approved in November 2011, with the POD for Jangkrik North East being approved in January 2013. Although in the POD approvals gas allocation was set at 70% for exports and 30% for domestic use, SKK Migas and Eni have agreed to work towards achieving a domestic allocation of 47% – assuming that this proves to be economically viable and is supported by the necessary infrastructure, said Widjonarko.

The tender process for the EPCI-1 project package, which involves constructing and installing a Floating Production Unit (FPU) barge, attracted 24 companies. The contract was awarded to a consortium consisting of Saipem Indonesia, Tripatra Engineers and Constructors, Chiyoda International Indonesia, and Hyundai Heavy Industries (HHI). Total contract value is $1.1 billion.

The new-build spread-moored FPU will have a treating capacity of 450 MMcf/d of gas and condensates. The scope of work includes engineering, procurement, fabrication of the FPU and the installation of a mooring system, as well as hook-up, commissioning and assistance to the start-up.

FPU due in 34 months: The FPU project will be carried out from the Saipem Execution Centre in Jakarta. The topsides fabrication activities will be carried out in Saipem’s Karimun Island Yard, also in Indonesia. The hull will be fabricated in HHI’s offshore yard in Ulsan, South Korea. The FPU is due to be delivered at site ready for surf hook-up in 34 months.

The EPCI-2 project package for the construction of an onshore receiving facility, pipeline, and other supporting equipment attracted 18 companies. It was awarded to a consortium consisting of Technip Indonesia-Technip Geoproduction (M).

The Engineering Procurement-3 contract for the construction of the subsea production system, control systems, and supporting equipment attracted 18 companies. It was awarded to FMC Santana Petroleum Equipment Indonesia. The order is worth an estimated $720 million. The scope of supply includes subsea trees, manifolds, jumpers and connection systems, umbilicals, tooling and associated topside and subsea control systems.

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