Natuna offshore facilities tenders called by year's end

Natuna offshore facilities tenders called by year's end

SINGAPORE (AFP): Tenders for building offshore facilities for Indonesia's mammoth Natuna natural gas project are expected to be called by the end of the year, an official with Indonesia's state-owned oil company Pertamina said here yesterday.

"At the end of this year, we hope to call tenders for the construction of the platforms, fabrication works, pipelines and other works," said G.A.S. Nayoan, senior executive vice-president of the Natuna project, which has the world's largest liquefied natural gas (LNG) reserves.

Tenders for the conceptual engineering design for up to six of the 16 platforms planned under the project had already been called in April this year, he said when fielding questions from the floor at an industry conference.

Nayoan told AFP that the tendering process at the end of the year was a milestone because "it shows that we are committed to the project and the project is going on."

The offshore facilities for the project are expected to include six treating platforms, six drilling platforms and four injection platforms.

Earlier reports had said that each of the treating platforms would be among the largest offshore platforms ever built.

Work on the US$42-billion Natuna project, to be jointly developed by Pertamina and U.S. oil giant Exxon, is scheduled to start in January 1997.

The gas-rich Natuna islands in the South China Sea have an estimated 210 trillion cubic feet of gas, of which 45 trillion cubic feet are recoverable.

Nayoan said that efforts would be made to reduce the cost of the project, whose 1995 estimate was only "$20 billion based on a zero percent increase in the consumer price index."

Industry sources say the $42-billion price tag for the project was based on a long-term projection that includes inflation.

"We are going to reduce the cost of the project, we will like to have it very low but it cannot be too low, you see, because we don't want to lose quality," Nayoan said.

He said that cost reduction was a task that should be shouldered by all players in the liquefied natural gas chain -- those in the upstream, downstream and transport businesses.

"The cost reduction attitude will keep the upstream, the downstream and the very downstream hydrocarbon industry in the bright sunshine of a sunshine industry," Nayoan said.

Indonesia together with Malaysia and Brunei are among the three major Southeast Asian producers of natural gas and they export the bulk of the commodity as LNG to Japan, South Korea and Taiwan.