Saipem Gets Tangguh LNG Contract

Saipem has been awarded two new E&C contracts for onshore and offshore work in Indonesia on the Tangguh LNG expansion project.

The contracts were awarded by BP Berau Ltd., as operator of the Tangguh LNG project, on behalf of the other production sharing contract parties, the Italian company said on Wednesday.

The first award is for the engineering, procurement, construction and installation of offshore facilities, consisting of two unmanned platforms and subsea pipelines. In accordance with the requirements of SKK Migas, Indonesia's upstream oil & gas regulator, Saipem will contribute to local content enhancement, including through its own Karimun fabrication yard.

The second contract for the construction of an onshore LNG process train with a liquefaction capacity of 3.8 million tons per annum, utilities, offsites, an LNG jetty and associated infrastructure, has been awarded to CSTS, a joint operation led by Indonesian EPC Contractor Tripatra with Chiyoda, Saipem and Suluh Ardhi Engineering. Completion of the projects is expected in 2020.

Earlier this month, BP and its partners approved the final investment decision (FDI) pertaining to expansion of Tangguh LNG project in Indonesia. The expansion project will add a third LNG process train (Train 3) and 3.8 million tonne per annum (mtpa) of production capacity to the existing facility, bringing total plant capacity to 11.4 mtpa. The project also includes two offshore platforms, 13 new production wells, an expanded LNG loading facility, and supporting infrastructure, BP said. Sources said that with falling costs in the industry the project was now put at the lower end of the $8bn-$10bn range.

BP said about 75 percent of the Train 3 annual LNG production has been sold to the Indonesian state electricity company PT. PLN (Persero). The remaining volumes are under contract to Kansai Electric Power Company in Japan, the other foundation buyer for Train 3.