KBR Partnership Awarded EPC Contract for Tangguh LNG Project Valued at $1.8 Billion

abarrelfullabarrelfull wrote on 05 Jan 2014 20:46

March 8, 2005

A joint operation between PT Brown & Root Indonesia, a subsidiary of KBR, JGC Corporation (JGC) of Japan and PT Pertafenikki Engineering (PFN) of Indonesia has been awarded the engineering, procurement, construction and commissioning (EPCC) contract by BP Berau, Ltd. for the Tangguh LNG plant at Teluk Bintuni, Papua Province, Republic of Indonesia. BP is the operator of the Tangguh project. KBR is the engineering and construction subsidiary of Halliburton (NYSE: HAL).

"This project represents KBR's ability to bring world-class engineering, procurement, construction, commissioning and project management skills to complex projects," said Dave Lesar, Chairman, President and CEO of Halliburton. "KBR is the leading EPC company in LNG projects, and we are committed to maintaining that position in the industry."

The EPCC Contract was won following a highly competitive and rigorous process in March 2003. After recognizing additional component and environmental factors that had accrued in the period following the bid submission, the final award was made on Sunday, March 6, 2005, at a value of US$1.8 billion.

The scope of the project includes the construction of a two-train LNG processing plant and associated support facilities. Each train will have a capacity of 3.8 million tonnes per annum (MTPA).

The Tangguh project represents the largest capital development project currently underway in Indonesia. Development of the winning bid for the project involved the KBR-JCG-PFN Joint Operation identifying more than 1500 potential optimizations and cost reductions to the project, and then selecting and applying those of the greatest benefit to BP.

"The bidding structure for the Tangguh project allowed us to extensively optimize the project to reduce costs, maximize the local content, decrease the environmental impact, lessen the execution risk and maintain the overall operability and maintainability of the project," said Lou Pucher, Senior Vice President of KBR's Energy & Chemicals division. "The KBR-JCG-PFN team is the first partnership to develop a major petrochemical facility in the remote and environmentally sensitive areas of Papua in far eastern Indonesia, and we are committed to helping BP achieve their long-term development goals for this new business location."

The work scope includes development of extensive infrastructure at the site including marine facilities, product storage, utility support systems, and housing and administrative facilities for the plant staff. The project is expected to begin producing LNG in 2008, with initial product shipments to China, South Korea, and the North American west coast.

BP's partners in the Tangguh Project are MI Berau B.V (held by Mitsubishi Corporation and INPEX Corporation); CNOOC Ltd.; Nippon Oil Exploration Berau; KG Companies (held by Japan National Oil Corporation, Kanematsu Corporation and Overseas Petroleum Corporation); and LNG Japan Corporation (held by Sojitz Corporation and Sumitomo Corporation).

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