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$1 Billion Contract for Indonesia’s First FLNG Goes to Wison New Energies

During the 50th anniversary of diplomatic ties between Malaysia and China, Wison New Energies, alongside PT Layar Nusantara Gas and Genting Oil & Gas (both Genting subsidiaries), signed an EPCIC (Engineering, Procurement, Construction, Installation, and Commissioning) contract on June 20 for the delivery of a FLNG (Floating Liquefied Natural Gas) facility.

The $962.8 million deal, which exceeds $1 billion with reimbursable costs of up to $70 million, covers a 1.2 mtpa FLNG unit. Tan Sri Lim Kok Thay, Chairman and Chief Executive of Genting, and Dato’ Sri Tan Kong Han, President and Chief Operating Officer and Executive Director of Genting, signed the contract with Liu Hongjun, Chairman of Wison.

Commenting on the agreement, Liu Hongjun said, “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 in Indonesia but also another milestone 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.”

The project is expected to take 27 months from the execution of the EPCIC contract, followed by an 18-month warranty period. Wison will construct the FLNG facility at its Nantong and ZhouShan shipyards in China. After passing the yard performance test, the FLNG will be towed to Teluk Bintuni, West Papua, Indonesia, for the final commissioning test, with an anticipated sailaway date from the ZhouShan shipyard in the second quarter of 2026.

The feed gas for the FLNG facility will be sourced from the Asap, Merah, and Kido structures within the Kasuri Block concession area in West Papua, awarded to Genting Oil Kasuri (GOKPL), another 95% indirect subsidiary of Genting. A production sharing contract (PSC) for the block was signed between GOKPL and BP MIGAS in May 2008, now succeeded by SKK MIGAS. Following the Indonesia government’s approval of the revised first phase development plan for the Asap, Merah, and Kido structures on February 9, 2023, the FLNG facility will receive 230 million standard cubic feet per day (mmscfd) of natural gas for 18 years, and an additional 101 mmscfd will be supplied to an ammonia and urea plant in West Papua for 17 years.

Additionally, PTLNG entered into a Limited Notice to Proceed (LNTP) agreement on September 8, 2023, to purchase long lead items worth $43.04 million, ensuring the project stays on schedule to deliver the first LNG in the third quarter of 2026. The LNTP agreement was extended to cover the progress of the engineering work up to the date of signing the EPCIC contract, including hull steel cutting on June 7. PTLNG committed $188 million under the LNTP agreement, forming part of the EPCIC contract price of $962.8 million.

Genting plans to fund the project through internally generated funds and project financing, with negotiations for financing from a group of Chinese and international lenders already in advanced stages.

In early January 2024, Wison New Energies initiated the design validation and pre-FEED phase for two FLNG projects in Nigeria. In March 2024, the company installed the first self-supporting prismatic shape IMO type-B (SPB) tank for Eni’s Congo LNG project at its Nantong yard.

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