Chiyoda-Sembawang team has lowest bid for Jambi gas project's EPC
Friday, July 12 2002 - 05:32 AM WIB
The next lowest bidders were Hyundai Heavy Industries and Technip-Coflexip.
The tender coup bodes well for SembE&C, which acquired UK-based process engineering consultant Simon Carves in May 2001 in a bid to strengthen its upstream engineering capabilities.
However, an award remains elusive because the winning bid of $340 million is 26 percent more than the original budget set by Devon Energy, whose Indonesian assets are being taken over by PetroChina, and its front-end engineering and design contractor Aker Kvaerner, which is also serving as an engineering sub-contractor to Chiyoda-SembE&C.
A project source said the higher cost arose from substantial changes to the work scope over the past 14 months, but so far there has been no talk of a rebid. The process is further complicated by the recent sale of Devon's Indonesian assets to PetroChina for $262 million cash. These properties -- which include stakes in the Jabung, South Jambi B and Tuban production sharing contracts -- produced about 1.1 million barrels of oil equivalent net to Devon from January to March.
The Chinese oil giant is still in the process of taking over its new assets, and is in no hurry to award any major contracts, industry sources said.
The EPC job is for phases three and four of Devon's Betara Complex gas development, which seeks to commercialise the Makmur and North Geragai fields in the Jabung PSC in Jambi province.
The EPC is also believed to be the largest onshore prize in Indonesia.
The project is due on stream next year at a stabilised rate of 130 million cubic feet of gas and 1315 tonnes of liquefied petroleum gas per day for export to Singapore and Japan respectively. Makmur and North Geragai are also set to produce between 15,000 and 20,000 barrels of oil per day.
The proposed facilities include an LPG floating production unit, a floating storage and offloading vessel, a mooring buoy, gathering lines and onshore plants for gas and natural gas liquids, along with requirements for directional drilling and shore crossings.
An added challenge is posed by the shallow waters in the area and high carbon dioxide levels in the gas.
Participants in the Jabung PSC are operator PetroChina (30 percent), Amerada Hess (30 percent), Petronas Carigali (30 percent) and Pertamina (10 percent). Jabung's reserves are conservatively tagged at 300 million barrels of liquids and 2 trillion cubic feet of gas. (*)