Italy’s engineering, drilling, and construction services giant Saipem has secured a significant contract related to a floating production, storage, and offloading (FPSO) unit, destined for one of Indonesia’s major energy projects.
Saipem, through its subsidiary PT Saipem Indonesia, has entered a joint venture with PT Tripatra Engineers and Constructors to undertake the engineering, procurement, construction, and installation (EPCI) of an FPSO for the Kutei North Hub field development project, situated in the Kutei Basin, East Kalimantan, Indonesia.
This ambitious development involves the drilling of 16 production wells at depths ranging from 1,700 to 2,000 meters. Additionally, it encompasses the installation of subsea systems that will connect to a newly constructed FPSO. This state-of-the-art unit is designed to process over 1 billion standard cubic feet of gas daily and handle 90,000 barrels of condensate per day, offering a substantial storage capacity of 1.4 million barrels.
The EPCI contract for this project is valued at approximately $2 billion. This lucrative deal was awarded by Eni North Ganal, a subsidiary of a business consortium formed by Eni and Petronas, two major players in the energy sector.
As part of the project execution, which is projected to last about 48 months, Saipem will engage in project management, detailed engineering, procurement of materials, fabrication, and comprehensive construction and installation activities. Furthermore, the phase will include the commissioning and startup of the FPSO unit.
The Kutei FPSO project represents a crucial component of the overall Kutei North Hub development. This initiative not only involves subsea development linked back to the new FPSO but also the establishment of a dedicated gas export pipeline to the Bontang LNG plant as well as provisions for domestic gas consumers via the existing East Kalimantan System.
This recent contract strengthens Saipem’s foothold in the floating production segment, showcasing the company’s unique blend of engineering prowess and local fabrication capabilities. Moreover, it highlights Saipem’s expertise in executing projects with expedited timelines, which is increasingly vital in the competitive energy landscape.
Interestingly, this contract follows Saipem’s recent strategic maneuver of divesting its stake in the Saudi Arabian entity Saipem (SAS) to ADES, marking the end of its shallow-water drilling operations in Saudi Arabia. The company continues to pivot toward deepwater exploration and production, reflecting a broader industry trend focusing on maximizing resource extraction from deeper horizons.