McDermott tipped to win W. Natuna project<\/p>\n
JAKARTA (JP): The West Natuna gas consortium announced on
\nThursday that PT McDermott Indonesia, the Indonesian unit of the
\nAmerican contractor McDermott Corporation, is a strong contender
\nfor the construction of a 650-kilometer underwater pipeline to
\nchannel natural gas from west of the Natuna islands to Singapore.<\/p>\n
Conoco Indonesia's vice president for development and
\nrelations A.R. \"Dudung\" Natanegara said during the final
\ncommercial tender that the McDermott bid was the lowest at US$335
\nmillion for the megaproject.<\/p>\n
\"We have yet to finish evaluating the company's proposal. But
\nit has a high probability of winning the project, given the fact
\nit's (offer) was the lowest (received) during the bidding,\"
\nDudung said.<\/p>\n
The United States-based Conoco is one of the consortium
\nmembers, which also include Britain's Premier Oil and Canada's
\nGulf Resources.<\/p>\n
McDermott's competitors in the bidding are ETPM of France,
\nJapan's Nippon Steel and Saipam of Italy. The companies quoted
\nthe cost of the project at $382 million, $415 million and $372
\nmillion respectively.<\/p>\n
McDermott's affiliation with former president Soeharto's
\ngolfing partner Mohammad \"Bob\" Hasan is widely known.<\/p>\n
Gulf Indonesia Resources' administration vice president
\nSupramu Santosa, said the West Natuna Group is currently
\nevaluating McDermott's proposal to check whether there are
\n\"provisions in the price proposal which might increase the real
\ncost of the project\".<\/p>\n
Evaluation results are expected in seven to 10 days.<\/p>\n
State oil and gas company Pertamina will further evaluate the
\nbids for between two weeks and one month.<\/p>\n
\"Pertamina will make a final decision on the winner of the
\nproject,\" Supramu said, adding Pertamina had the right to
\noverride the consortium and select a different contractor.<\/p>\n
Dudung and Supramu refused to respond to questions concerning
\nMcDermott's affiliation with Hasan and whether the connection
\nwill undermine the company's bid.<\/p>\n
\"The right to make a political decision lies with Pertamina.
\nWe only evaluate the bidders's technical ability and commercial
\nproposal,\" Dudung said.<\/p>\n
Pertamina has canceled most of its contracts with Bob Hasan as
\npart of a company drive to eliminate corruption, collusion and
\nnepotism.<\/p>\n
Early this year, Pertamina signed an agreement to sell natural
\ngas from the Premier, Conoco and Gulf gas fields in the South
\nChina Sea to Sembawang Gas (SembGas), for 22 years starting from
\nthe year 2001.<\/p>\n
The bidding process for the project has, however, sparked
\ncontroversies following the failure of two bidders, Allseas of
\nthe Netherlands, and Hyundai Heavy Industries of South Korea, to
\npass the technical evaluation phase.<\/p>\n
Several legislators, including Golkar representatives Priyo
\nBudi Santoso and Joeslin Nasution, accused the consortium of
\nunfairly pushing both companies aside, by engineering bidding
\nterms which were difficult for both companies to fulfill.<\/p>\n
They said the bidding terms were engineered in such a way that
\nthe project could be won by McDermott, Saipam, ETPM and Nippon
\nSteel -- four companies which the legislators said had formed a
\ncartel-like cooperation in the gas pipeline world market.<\/p>\n
In response to the outcry, Director General of Oil and Natural
\nGas Soepraptono Soelaiman, asked the consortium to eliminate
\nunfair bidding terms.<\/p>\n
Dudung said the consortium had relaxed several bidding terms
\nin response to the request, including the elimination of the
\nrequirement of prior building experience of more than 500
\nkilometers of underwater pipeline. The requirement was changed to
\nprior experience of building a 100-kilometer pipeline.<\/p>\n
However to meet deadlines, the consortium required bidders to
\nbe capable of building the underwater pipelines at the speed of
\n2.5 kilometers per day.<\/p>\n
Hyundai has no track record of building pipelines at that
\nspeed, Dudung said.<\/p>\n
According to Dudung, the consortium has a speed-of-work
\nrequirement, because SembGas will fine the consortium between
\n$500,000 and $1 million per day if it fails to deliver the gas on
\nschedule, starting April 15, 2001.<\/p>\n
Dudung and Supramu said the consortium was prepared to explain
\nthe case to the House of Representatives. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mcdermott-tipped-to-win-w-natuna-project-1447893297",
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