Pertamina to select 3 designs for Tangguh
Pertamina to select 3 designs for Tangguh
JAKARTA (JP): State oil and gas company PT Pertamina said it
would select three designs for its Tangguh natural liquefied gas
(LNG) plant in Berau Bay, Irian Jaya, to obtain the most
competitive cost for the construction of the LNG plant.
Pertamina processing director Ariffi Nawawi said aside from
the front end engineering design made by Japanese consortium
Chiyoda-Mitsubishi, Pertamina would also use two more designs
from different companies.
"The Japanese consortium is not the only winner of the bidding
process for the plant's design. There will be three winners, each
offering different technologies," Ariffi was quoted as saying by
mines and energy specialist web Petromindo.com last week.
Ariffi was responding to earlier media reports, which named
Chiyoda-Mitsubishi as the only design which Pertamina and its
American contractor Atlantic Richfield Company (ARCO) had chosen
for their LNG plant.
Initial reports cited that Pertamina selected two designs by
Chiyoda-Mitsubishi and the American firm Bechtel, pending
approval by the mines and energy minister.
Ariffi, however, acknowledged that Pertamina's last statement
to the media failed to mention Bechtel as among the winners,
giving the impression that Chiyoda-Mitsubishi had won the final
bid.
"We apologize for the incorrect news release," he said.
He said the draft news release sent by ARCO to Pertamina also
mentioned Bechtel as another winner of the bid, but Bechtel was
not mentioned in the final statement sent to the media.
Documents obtained by The Jakarta Post disclosed that Chiyoda-
Mitsubishi's design is based on Air Products and Chemicals Inc.'s
propane and pre-cooled-C3/MR technology.
It further said that Chiyoda submitted the best technical
proposal and the best commercial terms with a bid price of US$2.6
million for its design.
Bechtel proposed an $8 million design based on Phillip's
optimized cascade process technology.
The cost of each of these two designs was lower than
Pertamina's estimated price of $10 million.
Another technology, called PRICO II, was offered by British
firm Foster Wheeler and the American firm Flour Daniels, but they
both failed to pass the first phase of the tender since they
submitted too high a price for their designs, which was $27.5
million and $17.9 million respectively.
Reports on Chiyoda-Mitsubishi's win contravened with the
government's demand that three designs be selected for the
construction of the LNG plant.
Minister of Mines and Energy Susilo Bambang Yudhoyono has
reportedly instructed Pertamina to choose a winner from each of
the LNG liquefication technologies during the tender process.
Bambang has said the selection of winners representing each
technology would ensure Pertamina and its contractor gain the
most competitive price for the construction.
Pertamina, ARCO and its partners plan to build a two-train LNG
plant worth $1.5 billion with an annual output of 6 million tons
of LNG.
Companies that are interested in taking part in the bidding
for the construction of the LNG plant are free to choose from
each of the designs and Pertamina will select the company which
offers the lowest construction price.
"The main purpose of the multiple tender is that a tight
competition will occur, thus reducing the investment cost,"
Bambang was quoted by the website as saying in his letter dated
Feb. 29.
The Tangguh LNG project will be supplied with natural gas from
the Wiriagar, Berau and Muturi areas, which contain more than 14
trillion cubic feet (tcf) of proven gas reserves.
These gas fields are owned by ARCO, BG Exploration and
Production and several partners. (bkm)