Genting signs EPCIC contract with Wison for Indonesia FLNG facility
Malaysia’s Genting has signed an engineering, procurement, construction, installation, and commissioning (EPCIC) contract worth up to $1bn with China’s Wison New Energies for a floating LNG (FLNG) facility to be located offshore Indonesia, the company announced on June 20.
Under the EPCIC contract, Wison will construct the FLNG facility at their shipyards in Nantong and ZhouShan, China. The 1.2mn tonnes/year FLNG facility will be towed to its final destination in Teluk Bintuni, West Papua, for the final commissioning test. The project duration is estimated to be 27 months from the execution of the contract, followed by an 18-month warranty period. The target sail-away date from the ZhouShan shipyard is in the second quarter of 2026.
The feed gas for the FLNG facility will be supplied from the Asap, Merah, and Kido structures within the concession area of the Kasuri block in West Papua, awarded to Genting Oil Kasuri, a unit of Genting.
A production sharing contract was signed in May 2008 between Genting Oil and BP Migas, now called SKK Migas, the Indonesian oil and gas regulator. The government of Indonesia approved the revised first phase plan of development for the Asap, Merah, and Kido structures in February 2023.
According to the plan, Genting Oil will supply 230mn ft³/day of natural gas to the FLNG facility for 18 years, and 101 million ft³/day to an ammonia and urea plant to be built in West Papua, Indonesia for 17 years. This will be the first FLNG facility in Indonesia.
To ensure the project is completed according to schedule, Layar Nusantara Gas, another subsidiary of Genting, entered into a limited notice to proceed (LNTP) agreement for the purchase of long lead items worth $43.04mn with Wison (Nantong) Heavy Industry, an affiliate of Wison, in September 2023.
Layar Nusantara Gas is the special-purpose vehicle established to construct, own, and operate the FLNG facility. The LNTP agreement was extended to cover the progress of engineering work up to the signing of this EPCIC contract, including hull steel cutting on June 7, 2024, to achieve the first drop of LNG as scheduled in the third quarter of 2026. To date, PTLNG has committed a total of $188mn under the agreement, which forms part of the EPCIC contract price of $962.8mn, Genting said.
The project will be funded by internally generated funds and project financing. The company stated that it is in the advanced stages of securing project financing from a group of Chinese and international lenders.