Malaysia’s Genting has awarded a contract to China’s Wison New Energies to construct a 1.2 mtpa floating liquefied natural gas (FLNG) unit to be deployed offshore Indonesia, under a deal worth over $1 billion.
Genting’s engineering, procurement, construction, installation and commissioning (EPCIC) contract awarded to Wison on June 20, 2024, is valued at $962.8 million, which would exceed $1 billion including reimbursable costs of up to $70 million.
As part of the contract, Wison will construct the FLNG facility at its shipyards located at Nantong and ZhouShan in China.
After passing the yard performance test, the FLNG facility will be towed to its final destination located at Teluk Bintuni, West Papua, Indonesia, where the final commissioning test will be carried out.
The project duration is estimated to be 27 months from the execution of EPCIC contract followed by an 18-month warranty period.
The target sail away date from ZhouShan shipyard will be in second quarter of 2026.
The feed gas for the FLNG facility shall be supplied from the Asap, Merah and Kido structures within the concession area of the Kasuri Block in West Papua, Indonesia, awarded to Genting Oil Kasuri (GOKPL), which is 95% indirect subsidiary of the Gengting pursuant to a production sharing contract signed in May 2008 between GOKPL and BP MIGAS, the Indonesian oil and gas regulator, which had since been succeeded by SKK MIGAS.
The government of Indonesia approved the Revised First Phase Plan of Development for the Asap, Merah and Kido structures on February 9, 2023, which allows the supply of 230 million standard cubic feet per day (mmscfd) of natural gas to the FLNG facility for 18 years, as well as another supply of 101 mmscfd of natural gas to an Ammonia and Urea plant to be built in West Papua, Indonesia for 17 years.
This is Wison’s third contract to construct the FLNG facilities, after contracts with Exmar and ENI.
Also, this will be the first FLNG facility in Indonesia and the ninth FLNG in the world.
To ensure the project is completed in accordance with the planned schedule of achieving first drop of LNG in third quarter of 2026, PTLNG has entered into a limited notice to proceed (LNTP) agreement for the purchase of long lead items worth $43.04 million on September 8, 2023.
The LNTP agreement has been extended further to cover the progress of the engineering work up to the date of signing of this EPCIC contract including hull steel cutting on June 7, 2024 to enable first drop of LNG to be achieved in accordance with schedule in the third quarter of 2026.
To date, Genting has, through its 95%-owned indirect subsidiary PT Layar Nusantara Gas (PTLNG), committed to a total sum of $188 million under the LNTP agreement and this amount forms part of the EPCIC contract price of $962.8 million.
“We are very honored to cooperate with Genting Group. The successful signing of this project will further promote Belt and Road cooperation, and greatly contribute to Indonesia's energy transition and economic development. The Genting Group's FLNG facility is not only the first FLNG facility in Indonesia, but also another milestone FLNG project for WNE as this will be the third FLNG facility built by us. We will go all out, live up to the expectations of our client, and ensure the timely delivery of this project with high quality,” said Liu Hongjun, Chairman of Wison New Energies.
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