S'pore to build LNG facility<\/p>\n
SINGAPORE (Dow Jones): Singapore's SembCorp Engineering, a
\nunit of SembCorp Industries (P.SEC), said news this week that the
\nIndonesian House of Representatives may delay the pipeline
\nconstruction for the Natuna natural gas project has prompted
\nSembCorp to make \"contingency\" plans to build a liquefied natural
\ngas import and storage facility in Singapore.<\/p>\n
A SembCorp official confirmed Wednesday that SembGas, also a
\nunit of SembCorp Industries, and SembCorp Engineering are
\nexploring alternative sources of energy after reports out of
\nIndonesia surfaced Monday about hitches in the tender process for
\nthe pipeline portion of the $8 billion Natuna project.<\/p>\n
\"This is part of our plans to ensure alternative sources of
\nenergy, as we shouldn't put all our eggs in one basket by
\ndepending on any particular source,\" said SembCorp Engineering
\nPresident Tang King Fei, quoted in the Singapore Business Times
\nWednesday.<\/p>\n
\"We're looking at alternatives so the delivery of the gas
\ndoesn't get too delayed,\" confirmed the SembCorp official, who
\nasked not to be named. \"You have to satisfy your offtakers who
\nsign up with you. You can't have questions regarding sourcing.\"<\/p>\n
The $335 million contract for PT McDermott Indonesia to build
\na pipeline connecting the Natuna gas fields to Singapore is
\nreportedly in jeopardy after a special committee formed by the
\nIndonesian House of Representatives found irregularities in the
\ntendering process.<\/p>\n
The construction company, a subsidiary of J Ray McDermott SA
\nof the U.S., was contracted to build a 650-kilometer, underwater
\npipeline for the transportation of natural gas from the gas
\nfields in the South China Sea to Singapore for 22 years.<\/p>\n
The project, being developed by a consortium of state-owned
\nPertamina and its production contractors Conoco Inc. of the U.S.,
\nPremier Oil of Britain and Gulf Shores Resources Ltd. of Canada,
\nis scheduled to deliver 150 million cubic feet of gas a day from
\nthe gas fields near the Natuna islands beginning in 2001.<\/p>\n
The volume is slated to increase to 325 million cubic feet a
\nday by the second half of 2001.<\/p>\n
The House committee found evidence indicating that McDermott
\nhad benefited from \"insider information\" to cut field survey
\ncosts, allowing it to submit a lower bid than its competitors,
\nThe Jakarta Post reported Tuesday.<\/p>\n
Ever since the decision was made in May, legislators have
\ncriticized Pertamina for selecting McDermott because of the
\nconstruction company's partnership with former president
\nSoeharto's close friend, Muhammad \"Bob\" Hasan, who holds an 18
\npercent stake in McDermott.<\/p>\n
Pertamina officials couldn't be reached for comment Wednesday,
\nbut have maintained that McDermott won the project in an open,
\ntransparent bidding process.<\/p>\n
The Indonesian Parliament reportedly will debate the motion to
\ncancel McDermott's contract between Aug. 16 and Aug. 23.<\/p>\n
SembGas has obligations to invest an estimated $1.2 billion in
\nthe project, including the Singapore portion of the pipeline, two
\npower plants and transmission infrastructure on Jurong Island.<\/p>\n
The gas, if delivered, will supply Singapore power stations
\nand petrochemical plants.<\/p>\n
But SembCorp is taking no chances. \"If the Pertamina deal is
\noff, it isn't like we have no other options,\" the SembCorp
\nofficial said. \"But it doesn't mean the Pertamina deal has been
\ncompletely ruled out.\"<\/p>\n
SembCorp Engineering's Tang confirmed Tuesday that SembGas is
\nin discussions with Singapore's Jurong Town Corp. and other
\nauthorities on its plans to secure a suitable site for the LNG
\nfacility, the Business Times said.<\/p>\n
SembGas is also in discussions with Australian LNG suppliers
\nand has plans to talk with LNG suppliers in the Middle East
\nbefore the end of the year.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/spore-to-build-lng-facility-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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