Hudong and Saipem in race for Petronas’ FLNG contract

Chinese shipbuilder Hudong-Zhonghua and Italian contractor Saipem are competing to win a huge contract to build the third floating LNG producer for Malaysian energy giant Petronas.

Shipbuilding sources told LNG Prime that Saipem has secured a front-end engineering and design (FEED) contract from Petronas for the new FLNG which would produce about 2 mtpa.

Hudong would work with Saipem on the development as a subcontractor, the sources said.

However, Petronas has also awarded the FEED contract to a consortium consisting of South Korea’s Samsung Heavy Industries and Japan’s JGC, the sources said. Samsung Heavy and JGC already delivered the second FLNG to Petronas.

These two consortiums would compete to win the EPC contract to build the FLNG for the Malaysian firm, the sources said.

FEED to take up to 10 months

As part of the FEED contract, Hudong would focus on the FLNG’s hull while Saipem would work on the topside modules. The FEED would last up to 10 months, the sources said.

One of the several yards which could potentially build the topside modules is China’s Wison Offshore and Marine, which recently delivered four giant Arctic 2 LNG modules.

The sources did not provide the potential value of the EPC contract as this is yet to be determined and the final price depends on several factors.

Local media reports in Malaysia previously suggested that Petronas would deploy the FLNG near-shore in the eastern state of Sabah on the island of Borneo.

The reports said that Petronas could make a final investment decision on the project worth billions of dollars in 2022.

The only energy firm with two FLNGs

Currently, Petronas is the only energy company in the world that owns and operates two FLNG facilities, both located offshore Sabah.

It has recently shipped the 50th cargo from its first floating LNG producer located in the Kebabangan gas field, offshore Sabah. The 1.2 mtpa PFLNG Satu loaded the milestone cargo on September 25.

In addition, Petronas has earlier this year delivered the first cargo from its second floating LNG producer located in the Rotan gas field, offshore Sabah as well.

With a capacity of 1.5 mtpa, PFLNG Dua arrived at the field in March last year following a long journey from Samsung Heavy.

Should the third FLNG materialize, Petronas would produce about 4.7 mtpa of LNG from its three floating units offshore Sabah.

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