Tuesday, October 25, 2005

Bakrie company bags US$84 million contract

State-owned gas transmission and distribution company PT Perusahaan Gas Negara (PGN) Tbk awarded a US$84 million contract to PT South East Asia Pipe Industries (Seapi), a subsidiary of PT Bakrie & Brothers Tbk, to supply pipes for the Labuhan Maringgai-Muara Bekasi undersea gas pipeline project.
Seapi will work with Indian company Welspun Gujarat Stahl Rohren Ltd to supply 32 inch diameter pipes for 160 km. Contractor for the project is in the bidding process.
It is interesting because only few months ago, Indonesian Pipe Producers Association (Gapipa) accused Indian pipe producers had dumped their products in Indonesian market to get the PGN project. Seapi President and deputy chairman of Gapipa Abas F Soeriawidjaja in early July accused three Indian pipe producers involved in a conspiracy to dump their products at 30% cheaper than local products. I don't know how we interpret Seapi's cooperation with Welspun this time.
Late last month, PGN awarded smaller contract worth US$15 million and Rp29 billion (US$3 million) to PT KHI Pipe Industries, a subsidiary of state-owned PT Krakatau Steel, to supply pipes for Muara Bekasi-Rawamanyu segment.
Few years ago, Seapi also won the contract to supply 65% of pipes for the Grissik-Singapore gas pipeline project. That time Seapi worked with Pohan Steel Company (Posco), South Korea.
Previously Welspun also bags US$92 million and Rp195 billion (US$20 million) contract from PGN to supply Grissik-Pagardewa linepipes of 199.5 km with 36 inch diameter. Welspun won the contract with other Indonesian partner PT Abadi Kuasa Karya.
Japanese JFE Engineering Corporation had been appointed as contractor for engineering, procurement, and construction of Pagardewa-Labuhan Maringgai of 270 km with 32 inch diameter. The contract price for the South Sumatra West Java (SSWJ) Phase I pipeline, approved by the Japan Bank for International Cooperation (JBIC), is US$161 million.
Meanwhile contractor for pipeline design, construction, and quality test for SSWJ Phase II Pagardewa-Labuhan Maringgai is Punj Loyd Ltd with contract value of US$17.5 million and Rp308.4 billion (US$30 million). PLL will also install fiber optic network along the pipeline.
The SSWJ Phase I pipeline is developed to meet gas demand for industries in Western part of Java island by transporting gas from Pertamina's Pagardewa gas field in Sumatra. The transmission pipeline, funded mostly by soft-loan from JBIC, has the capacity of 460 MMSCFD which can be extended to 600 MMSCFD. The project is expected to complete in March 2007.
PGN is concurrently develop SSWJ Phase II transmission from Grissik in Sumatra to Rawamaju in West Java to transport gas from ConocoPhillips Coridor Block in Grissik. The capacity of SSWJ Phase II is 520 MMSCFD which can be extended to 600 MMSCFD. The completion of this project is scheduled by the end of October 2006.
Tomen Corp and Nippon Steel also awarded the SSWJ Phase I for 105 km pipeline from Labuhan Maringgai to Cilegon, Java.

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