| Work Detail |
Saipem, Italy’s engineering, drilling, and construction services provider, has won a new offshore assignment with BP Berau, the Indonesian subsidiary of the UK-headquartered energy giant BP. Thanks to this deal, the Italian player will work on an Asian integrated project, handling the part related to offshore facilities for natural gas production and transportation alongside carbon capture, utilization, and storage (CCUS).
BP selected Saipem, together with its consortium partner PT Meindo Elang Indah, for an offshore engineering, procurement, construction, and installation (EPCI) contract. The firm’s activities cover the EPCI segment related to two wellhead production platforms: a wellhead platform for the re-injection of CO2 and approximately 90 kilometers (km) of associated pipelines.
These platforms will be fabricated in Karimun, which is said to be the Italian player’s largest yard worldwide and one of the largest in the Southeast Asian region, with over 5,000 employees and an area of approximately 1.4 million square meters, including the marine base and docks.
The EPCI contract is part of an integrated project, known as the Tangguh UCC project, encompassing the Ubadari field development, enhanced gas recovery through carbon capture, utilization, and storage (EGR/CCUS) and onshore compression in Papua Barat Province, Indonesia. While the deal is worth approximately $1.2 billion, Saipem’s share is around $1 billion.
This integrated project entails the production of natural gas resources from the Ubadari offshore field and its transportation to the onshore LNG plant, where it will undergo a CO2 separation process. Afterward, the captured CO2 will be sent into an offshore platform for re-injection into the reservoir, helping to extract additional natural gas resources.
According to Saipem, this award consolidates its position in the natural gas and CO2 capture and storage project segments, thanks to “a unique combination of world-class assets with engineering and technological know-how.”
The contract comes shortly after BP disclosed a final investment decision (FID) for the project, revealing that the compression development would unlock around 3 trillion cubic feet (tcf), or 84.9 billion cubic meters (cbm), of additional gas resources, extending gas feed to the oil major’s existing LNG facility – Tangguh – through the start-up of the Ubadari gas field, which is anticipated in 2028.
The Tangguh LNG project is a unitized development of six gas fields in the Wiriagar, Berau, and Muturi production sharing contracts (PSCs) in Bintuni Bay, Papua Barat Province. Thanks to the extension secured in late 2022, the PSC, which was about to expire in 2035, will be valid until 2055. Once the third LNG train was added, with operations beginning in 2023, the plant’s total liquefaction capacity reached 11.4 million tons per year.
The project is operated by a consortium led by BP with a 40.22% participating interest, with partners MI Berau (16.30%) CNOOC Muturi (13.90%), Nippon Oil Exploration (Berau), (12.23%), KG Berau Petroleum (8.56%), KG Wiriagar Petroleum (1.44%), Indonesia Natural Gas Resources Muturi (7.35%).
Saipem won multiple assignments over the past few months, including a $1.9 billion win for TotalEnergies’ GranMorgu oil development offshore Suriname.
BP has also been busy on the oil and gas front this year, as confirmed by multiple project updates and deals, including the recent offshore portfolio addition of a new block off Trinidad’s north coast, where it has not undertaken any hydrocarbon exploration activities. |
