FLNG construction in progress as Asian player’s project marks ‘critical milestone’ with procurement award

Malaysia’s investment holding and management player Genting has taken further steps to bring to life its floating liquefied natural gas (FLNG) project, which is said to be the first one in Indonesia. Aside from the inroads made in constructing the FLNG, the firm has also inked a procurement deal and a construction, installation, and commissioning contract to ensure full linkage of its upstream development at its Indonesian block to its downstream FLNG facility.

The Asian firm’s 95%-owned indirect subsidiary, PT Layar Nusantara Gas (PTLNG), entered into definitive agreement on October 23 with China National Machinery Import & Export Corporation (CMEC) and Shandong Kerui Energy Development (Kerui) for the design, engineering and procurement activities for the onshore gas processing plant, connecting pipelines and supporting facilities, which are part of midstream infrastructure for the Genting FLNG project to be located in West Papua, Indonesia.

The company claims the procurement deal, with a fixed lump sum price of $182.87 million excluding a reimbursable sum of $2.57 million, has enabled it to achieve “another critical milestone” in its floating LNG project after hiring Wison New Energies on a $1 billion contract to construct the 1.2 mtpa FLNG facility, which represents the Chinese firm’s third contract to build FLNGs. The vessel was 32.83% completed as of September 26, 2024.

Following construction at Wison’s Nantong and ZhouShan shipyards in China, the FLNG will be towed to its final destination after it passes the yard performance test. The final commissioning test will be carried out once the vessel arrives at Teluk Bintuni in West Papua. The anticipated sail-away date from ZhouShan shipyard is slated for the second quarter of 2026.

The Malaysian player’s subsidiary also entered into a separate contract for the construction, installation and commissioning of the midstream infrastructure with a local Indonesian company called PT China Construction Yangtze River Indonesia (PT CCYRI) for a fixed lump sum contract price of over IDR 2,053,215,546,327.001 (around $130.71 million) excluding reimbursable sum of IDR213,611,206,985.00 (almost $13.6 million).

Once the midstream infrastructure is completed, which is estimated to occur in 25 months, it will be ready to receive raw gas from the Asap, Merah, and Kido structures within the concession area of the Kasuri Block in West Papua, awarded to Genting Oil Kasuri (GOKPL), another 95% indirect subsidiary of the company under a production sharing contract signed in May 2008 between GOKPL and BP MIGAS, the Indonesian oil and gas regulator, which had since been succeeded by SKK MIGAS.

Furthermore, the raw gas from upstream will be treated at the midstream infrastructure before being liquified into LNG at the FLNG vessel. Genting claims that GOKPL’s upstream development under the Kasuri PSC has progressed well, with reentry activities conducted at the Asap 4X well, spudded in August 2024, and the Asap 2X well in October 2024.

Some of the long lead items have been procured for the upstream development, and the pre-qualification review process for the early production facility, alongside the engineering, procurement, and construction contract, has been completed.