Pioneer tanker-to-FPSO conversion at Indonesian shipyard enters commissioning phase

Singapore-based shipbuilding player PaxOcean has confirmed the inroads made in repurposing a tanker into a floating production, storage, and offloading (FPSO) vessel, which will lend a helping hand in ramping up oil and gas production off the coast of Indonesia.

Given the plans for the development of 133 non-national strategic projects (PSN) in the upstream oil and gas industry by 2029, the Upstream Oil and Gas Regulatory Task Force (SKK Migas) has previously disclosed that a total investment of Rp58 trillion or $3.5 billion would be needed to bankroll the hydrocarbon expansion.

Currently, multiple projects are underway in Indonesia, including the Forel and West Belut projects in the Riau Islands, which are slated to come online with production capacities of 10,000 barrels of oil per day (bopd) and 50 million standard cubic feet per day (mmscfd). The operator of these assets in the prolific South Natuna Sea Block B, Medco Energi, has set its 2024 oil and gas production target at 145 thousand barrels of oil equivalents per day (mboepd).

The company decided to acquire some of ConocoPhillips’ assets in September 2016, thus, it inked a deal to buy two subsidiaries of the oil major – ConocoPhillips Indonesia and ConocoPhillips Singapore Operations – which enabled it to get a stake in the South Natuna Sea Block B offshore Indonesia.

Following a visit to its Batam yard facilities in Tanjung Uncang from Dwi Soetjipto, Chairman of SKK Migas, and Ronald Gunawan, Director and Chief Operating Officer of Medco Energi, on July 3, PaxOcean made further progress on the conversion of a tanker to an FPSO, which would be deployed at Medco’s field.

The project, which has resulted in the FPSO Marlin Natuna moving to the commissioning phase, is set to boost domestic oil and gas production, supporting Indonesia’s energy security. The Singapore shipbuilder underlines that this FPSO will be the first-ever tanker-to-FPSO conversion project undertaken at an Indonesian shipyard upon completion.

The vessel is anticipated to depart in August 2024 for the Forel field in Natuna, Riau Islands. The FPSO Marlin Natuna is scheduled to become operational by the fourth quarter of 2024, raising domestic oil production by around 10,000 bopd. Medco’s Q1 2024 oil and gas capital expenditure was $83 million, mainly used to progress developments in Corridor (Suban), Natuna (Forel and West Belut), and producing wells in Oman Block 60.

The company has stakes in 11 offshore assets, five in Indonesia and six abroad in Thailand, Tanzania, Vietnam, and Mexico. MedcoEnergi is the operator and holds a 40% interest in the South Natuna Sea Block B production sharing contract (PSC), consisting of 15 offshore platforms, three producing subsea fields, one floating storage and offloading unit (FSO), and the FPSO Belanak.

A few months ago, PaxOcean delivered a new class of compact semi-submersible (CSS), said to be designed and equipped to meet current and anticipated demands of the offshore industry, destined to work off the coast of Brunei for Brunei Shell Petroleum (BSP), a subsidiary of the UK oil major Shell.