Genting Berhad and Wison New Energy to Develop $1 Billion FLNG Facility in Indonesia

Genting Berhad has entered into an Engineering, Procurement, and Construction Contract with Wison New Energies Co. Ltd. The two companies will develop a 1.2 MTPA Floating Liquefied Natural Gas (FLNG) Facility in Indonesia. Furthermore, the two parties agreed on a contract price of USD 962.8 million (which would exceed USD 1 billion, including reimbursable costs of up to USD 70 million). This will be the first FLNG facility in Indonesia and the ninth FLNG in the world. 

Shell Prelude FLNG was the first FLNG in the world. Wison will construct the FLNG facility at their shipyards in Nantong and ZhouShan, China. After passing the yard performance test, the FLNG Facility shall be towed to its final destination, Teluk Bintuni, West Papua, Indonesia, where the final commissioning test will be carried out. 

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Following the execution of the EPC contract, the project's estimated duration is 27 months, and then there will be an 18-month warranty period. The target sail-away date from ZhouShan shipyard will be in the second quarter of 2026. The feed gas for the FLNG facility shall be supplied from the Asap, Merah and Kido structures within the concession area of the Kasuri Block in West Papua, Indonesia. The project will play a pivotal role in the Global FLNG market.

The Government of Indonesia approved the Revised First Phase Plan of Development for the Asap, Merah, and Kido structures on February 9, 2023, which allows the supply of 230 million standard cubic feet per day (“mmscfd”) of natural gas to the FLNG facility for 18 years, as well as another supply of 101 mmscfd of natural gas to an ammonia and urea plant to be built in West Papua, Indonesia, for 17 years.

What is a Floating Liquefied Natural Gas (FLNG) Facility?

A Floating Liquefied Natural Gas (FLNG) facility is a remarkable innovation that enables the production, liquefaction, and storage of natural gas at sea. Let's explore this concept in more detail:

Offshore Gas Development: FLNG facilities operate in offshore environments, floating above natural gas fields. Their primary purpose is to extract and process natural gas from these underwater fields.

Liquefaction: The extracted natural gas is processed and chilled to an extremely low temperature (around -162 °C or -260 °F), transforming it into liquefied natural gas (LNG).

Storage and Transfer: The FLNG facility stores and transfers the LNG directly to specialized carriers. These carriers transport the fuel to global LNG markets.

Unlocking Remote Gas Fields: FLNG technology allows the development of smaller, remote gas fields that would otherwise be uneconomical to exploit. By relocating LNG processing to the sea, FLNG facilities make these resources accessible.

Reduced Capital Expenses: Unlike traditional onshore LNG plants, FLNG facilities offer significant cost savings. They eliminate the need for extensive land-based infrastructure and associated expenses.

Environmental Impact: FLNG minimizes the ecological footprint by operating offshore. It reduces disturbances in sensitive coastal ecosystems and avoids land acquisition challenges.

Read: TotalEnergies has Signed two LNG Contracts in Asia

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