A joint venture between CNOOC Energy Technology and Pulau Kencana Raya has pulled ahead of its two rivals in the contest to provide a floating production unit for the Madura MDA and MBH project in Indonesia.
The Chinese-Indonesian alliance is understood to have submitted the best commercial offer to project owners Husky Energy and China National Offshore Oil Corporation (CNOOC).
Two other groups led by Modec and Emas Offshore, and also including Indonesian partners, are the two competing potential suppliers.
Sources said there is no guidance as yet as to when a turnkey contract will be awarded.
However, Madura MDA and MBH is predominantly a gas project and the operating company already has a fixed price, plus a gas sales agreement in place to underpin contract awards and a final investment decision.
The floating production unit will be designed to handle up to 175 million cubic feet of gas per day, including a maximum 110 MMcfd from the MDA field and 55 MMcfd from the MBH field.
The vessel is likely to be a conversion and will be due for delivery 24 months after contract award.
Husky and CNOOC intend to charter the FPU for 10 years and will have an option to purchase the floater at a very low price, said sources.
Sources said that, if CNOOC Enertech and Pulau Kencana Raya are successful, the hull of the vessel will be fabricated in China, although there are calls being made domestically for the hull to be built in Indonesia.
Details around construction of the topsides could not be confirmed.
The MDA and MBH fields sit within the Madura Strait production sharing contract in the East Java Sea.
The project is the follow-up to the Madura BD development, which is in the construction stage.
The BD project is designed to produce 40 MMcfd of gas and 2400 barrels per day of condensate.
Husky said recently that the jacket and topsides for the BD wellhead platform were sailed out in late October and installed in 55 metres of water.
Development drilling is in progress, and the project is on target for first production in the 2017 timeframe.
Madura BD also involves a leased floating production, storage and offloading vessel being built by Bumi Armada.
“Our Indonesia gas developments represent some of the strongest growth opportunities in our deep portfolio and are particularly strategic in the current commodity price environment,” said chief executive Asim Ghosh.
Another discovery in the same area, MDK, will be tied into the existing fields and begin production in roughly the same timeframe.
The MDK field is expected to produce 10 MMcfd at peak. Husky said a gas price/volume contract is being negotiated.
Longer term, the company has four other Madura Strait discoveries that are under evaluation for development.
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