West Natuna pipeline project to be bid soon
West Natuna pipeline project to be bid soon
JAKARTA (JP): The West Natuna gas contractors will soon hold a
tender for the construction of the underwater pipeline
megaproject to channel natural gas from the gas fields west of
the Natuna islands to Singapore.
Rab Speirs, president of Premier Oil Natuna Sea Ltd, a
subsidiary of Britain's Premier Oil, one of the contractors, said
on Friday that the invitation for the tender would be sent to
prospective bidders later this month.
"The technical evaluation of the bidders has already been
completed and the invitation for the commercial tender will be
going out in two weeks," Speirs said on the sidelines of the
ceremony to sign the gas sales agreement between state oil and
gas company Pertamina and Singapore's Sembawang Gas (SembGas).
Speirs said the final tender would be held here but he refused
to name the contractors which had passed the technical evaluation
and now qualify for the tender.
A legislator of the ruling Golkar group, Priyo Budi Santoso,
said earlier that eight companies had qualified for the final
tender.
They are McDermott, Global, Allseas of the United States;
Saipem of Italy; EPPM of France; Japan's Nippon Steel; South
Korea's Hyundai and Daewoo.
Priyo earlier blasted the West Natuna consortium for
intentionally engineering tender requirements to disadvantage
bidders from Asia.
Priyo said the tender's terms which Asian companies complained
about stipulated, among other things, that the contractors should
have a track record of building at least three pipelines of the
same length as the West Natuna pipeline over the past five years.
"All the Asian contractors participating in the bidding only
have experience of building shorter pipelines. But, the
requirements will exclude them despite the fact that they offer
more competitive prices than the others," Priyo said.
Director General of Oil and Gas Soepraptono Soelaiman, in a
hearing with the House of Representatives' Commission V for mines
and energy, industry and trade and investment, said that the
ministry had sent a letter to the consortium calling on them to
make "reasonable" tender requirements.
Speirs said the consortium would not change the tender
requirements to secure the quality of the pipeline and to prevent
penalties being applied by SembGas for gas supply problems.
"We didn't change the requirements and we communicated back to
the ministry the reasons why the requirements were critical to
the contract," Speirs said.
Under the gas sales contract, Pertamina will supply SembGas
with natural gas for 22 years from 2001 to 2023 with a possible
five year extension.
The natural gas will be extracted from the gas fields in the
South China Sea owned by Premier Oil, Canada's Gulf Resources,
and Conoco of the United States and will be channeled from the
West Natuna gas fields to Sakra island off Singapore through a
650-kilometer pipeline with a diameter of 28 inches.
The West Natuna Group consortium will reportedly invest US$400
million to build the pipeline.
The government has extended the production sharing contracts
(PSC) held by the three contractors up to 2029 to secure the gas
supply to SembGas throughout the sales contract period.
The gas will be used to feed Singapore's power plants and
petrochemical plants.
Premier's chief executive Charles Jamieson, who was present at
the ceremony, said the gas sales agreement between Pertamina and
SembGas showed that international companies remained confident
about Indonesia's prospects in the oil and gas sector despite the
current economic and political crises.
Sales of the West Natuna gas will reportedly generate total
revenue of about $8 billion over 22 years, $2.7 billion of which
-- or $123 million per year -- will go to the government in taxes
and profit sharing. (jsk)