JGC Clinches $240M EPC Contract to Build Gas Processing Plant in Aceh

Japan's JGC Corporation reported Friday that its unit JGC Indonesia, jointly with PT. Encona Inti Industri, has been awarded an engineering, procurement and construction (EPC) contract for the construction of a gas processing plant in Aceh Province, Sumatra, Indonesia by PT Medco Energi Internasional Tbk's subsidiary PT Medco E&P Malaka.

The lump-sum turnkey contract has a value of approximately $240.3 million (JPY 27 billion) and is scheduled for completion in the first quarter of 2018 (1Q 2018).

The project contract calls for the construction of a plant with a processing capacity of 90 million standard cubic feet per day (MMscf/d) to produce sales gas, condensate, and solid sulfur from natural gas produced in Block A that is being developed by Medco and its partners in Aceh -- an area rich in natural resources such as oil and gas. The produced sales gas will be used principally by a gas-fired power plant belonging to Indonesia’s state-owned electric power company in Aceh and by a state-owned fertilizer company.

In the 1970s, JGC was the first company to set up an EPC-capable subsidiary in Indonesia when it established the former PT. Pertafenikki Engineering (renamed JGC Indonesia in 2007). Through to the present, the subsidiary has been steadily accumulating project experience while responding to local needs. This is the largest project in the history of JGC Indonesia, and JGC understands that the contract has been awarded to JGC Indonesia on the basis of its experience in Indonesia and the high evaluation accorded to its project execution capabilities, in addtion to its cost-competitive proposal.

JGC is now promoting the strengthening and expansion of its overseas EPC subsidiaries, and intends to further enhance JGC Indonesia’s project execution capabilities through the successful execution of this very important project.

MedcoEnergi indicated separately that first gas from the Block A gas project will commence in 1Q 2018 under a gas sales agreement signed in January 2015 with Indonesia's national oil company PT Pertamina to deliver 58 billion British Thermal Units (Btu) per day, or 198 Trillion Btu over 13 years.

“This is just the first phase of our plans to develop and monetize the resources on this Block,” Roberto Lorato, CEO of MedcoEnergi, said in a company's statement.

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