Genting Oil & Gas, via its indirect unit PT Layar Nusantara Gas (PTLNG), has entered into a deal with China’s Wison (Nantong) Heavy Industry to secure long lead items for a floating LNG production project in West Papua, Indonesia.
In that regard, PTLNG and the unit of Wison Offshore and Marine have entered into a limited notice to proceed agreement on September 8 for the purchase of $43.04 million of long lead items for a 1.2 Mtpa FLNG facility.
Wison O&M said in a statement PTLNG is the special purpose vehicle established to construct, own and operate a 1.2 Mtpa FLNG facility, an onshore gas processing plant, and pipeline to be located in West Papua, Indonesia.
The agreement allows PTLNG to place orders for long-lead items including cold box, compressor, and generator sets, prior to the execution of the engineering, procurement, construction, installation, and commissioning (EPCIC) contract, the Chinese firm said.
Also, Wison O&M is currently conducting front-end engineering and design (FEED) study for the FLNG facility and expects to complete it by the end of November 2023.
First LNG in 2026?
Wison’s chairman Hua Bangsong said that the signing of this deal marks a “key milestone” to achieve the first drop of LNG in the Kasuri block by the second quarter of 2026.
“Due to Indonesia’s archipelago nature and abundant marginal gas resources, FLNG facility offers the most cost-effective option to monetize natural gas in the region, and Wison sees Indonesia as an important strategic market for FLNG,” Bangsong said.
Genting Oil & Gas (GOGL) is a unit of Genting Group and its current assets include 100 percent participating interest in the Kasuri PSC in West Papua, Indonesia.
Genting Group’s president and COO Kong Han Tan said that this project shall be the first FLNG facility in Indonesia and ninth in the world.
He noted that the government of Indonesia has approved on Februay 9 the revised first phase plan of development for the Asap, Merah, and Kido structures.
This allows the supply of 230 million cubic feet per day of natural gas to the FLNG facility for 18 years, as well as another supply of 101 mmcfd of natural gas to an ammonia and urea plant to be built in West Papua, Indonesia for 17 years.
The Asap, Merah and Kido structures are within the concession area for the Kasuri block in West Papua, and operated by Genting Oil Kasuri (GOKPL), another wholly-owned indirect subsidiary of GOGL.
Wison boosting FLNG business
“Sri Tan further expressed Genting Group’s confidence in Wison as this will be the third FLNG facility which Wison will be constructing, where the previous two were for majors like Exmar and Eni,” the statement said.
The Chinese firm won a contract from Italy’s Eni in December last year to build a 380 meters long 2.4 mtpa FLNG and officially started work on the project in January.
It will be able to store over 180,000 cubic meters of LNG.
The FLNG will serve Eni’s Congo project which will reach an overall LNG production capacity of 3 million tons per year, or about 4.5 billion cubic meters/year, from 2025.
Delfin Midstream, the US developer of a floating LNG export project in the Gulf of Mexico, recently also joined forces with Wison to develop floating LNG producers.