$1 billion deal for world’s ninth and Indonesia’s first FLNG goes to Wison New Energies

Malaysia’s investment holding and management player Genting has handed out a $1 billion contract to Wison New Energies, a China-based provider of clean energy services, to construct a floating liquefied natural gas (FLNG) facility, which is said to be the first one in Indonesia and the ninth FLNG in the world. Following deals with Exmar and Eni, this is Wison’s third contract to build FLNG facilities.

While Malaysia and the People’s Republic of China were commemorating the 50th anniversary of the establishment of diplomatic ties between the two countries, Wison New Energies and PT Layar Nusantara Gas and Genting Oil & Gas, both subsidiaries of Genting, signed an engineering, procurement, construction, installation, and commissioning (EPCIC) contract on June 20 for the delivery of a FLNG facility.

This deal, which the Malaysian firm considers part of its commitment to energy innovation and sustainability, comes with a price tag of $962.8 million, exceeding $1 billion with reimbursable costs of up to $70 million, for a 1.2 mtpa FLNG unit. The deal was inked by Tan Sri Lim Kok Thay, Chairman and Chief Executive of Genting, together with Dato’ Sri Tan Kong Han, President and Chief Operating Officer and Executive Director of Genting, with Liu Hongjun, Chairman of Wison.

Commenting on the award, Hongjun underlined: “The successful signing of this project will further promote Belt and Road cooperation, and greatly contribute to Indonesia’s energy transition and economic development. The Genting Group’s FLNG facility is not only the first FLNG facility in Indonesia, but also another milestone FLNG project for WNE as this will be the third FLNG facility built by us. We will go all out, live up to the expectations of our client, and ensure the timely delivery of this project with high quality.”

With the project duration estimated to be 27 months from the execution of the EPCIC contract followed by an 18-month warranty period, Wison will build the FLNG facility at its Nantong and ZhouShan shipyards in China. Once it passes the yard performance test, the FLNG will be towed to its final destination at Teluk Bintuni, West Papua, Indonesia, where the final commissioning test will be carried out. The anticipated sailaway date from ZhouShan shipyard is slated for the second quarter of 2026.

Furthermore, the feed gas for the new FLNG facility is expected to be supplied from the Asap, Merah, and Kido structures within the concession area of the Kasuri Block in West Papua, Indonesia, awarded to Genting Oil Kasuri (GOKPL), another 95% indirect subsidiary of the Malaysian firm.  In May 2008, a production sharing contract (PSC) was inked for the block between GOKPL and BP MIGAS, Indonesia’s oil and gas regulator, which had since been succeeded by SKK MIGAS.

Thanks to the Indonesia government’s approval of the revised first phase plan of development for the Asap, Merah, and Kido structures from February 9, 2023, 230 million standard cubic feet per day (mmscfd) of natural gas will be supplied to the FLNG facility for 18 years, as well as another supply of 101 mmscfd of natural gas to an ammonia and urea plant to be built in West Papua, Indonesia for 17 years.

Moreover, PTLNG entered into a limited notice to proceed (LNTP) agreement on September 8, 2023, for the purchase of long lead items worth $43.04 million to ensure the project is completed within the planned schedule of achieving the first drop of LNG in the third quarter of 2026.

The LNTP agreement was also extended to cover the progress of the engineering work up to the date of penning the EPCIC contract, including hull steel cutting on June 7. PTLNG committed to a sum of $188 million under the LNTP agreement, which forms part of the EPCIC contract price of $962.8 million.

According to the Malaysian firm, the project will be funded by internally generated funds and project financing. To this end, Genting has already embarked on negotiations and claims to be in the advanced stage of securing project financing from a group of Chinese and international lenders.

At the start of January 2024, Wison New Energies kicked off the design validation and pre-FEED phase for two FLNG projects in Nigeria. In March 2024, the Chinese firm hoisted the first self-supporting prismatic shape IMO type-B (SPB) tank for Eni’s Congo LNG project into hull cargo hold space at the Nantong yard.