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Saipem Opens Oil and Gas Facility
Ririn Radiawati Kusuma | December 04, 2011

Saipem Indonesia’s new fabrication yard on Karimun Island covers 400,000 square meters. The yard is expected to boost oil and gas exploration in the region by providing equipment to construct offshore platforms, drill wells, and extract oil and gas. JG Photo/Ririn Radiawati Kusuma Saipem Indonesia’s new fabrication yard on Karimun Island covers 400,000 square meters. The yard is expected to boost oil and gas exploration in the region by providing equipment to construct offshore platforms, drill wells, and extract oil and gas. JG Photo/Ririn Radiawati Kusuma
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Karimun, Riau Islands. Saipem Indonesia, the local unit of Italian oil and gas industry contractor Saipem, on Saturday inaugurated a fabrication yard in Riau Islands, a project that cost the company $450 million.

The fabrication yard, which covers 400,000 square meters of land in the Meral subdistrict of Karimun Island district, will support activities in the oil and gas sector, especially exploration and exploitation work.

It will provide equipment and infrastructure to construct offshore platforms, drill wells and extract oil and gas.

The new site will also make it easier to modify vessels for oil and gas exploration, and it will provide temporary offshore storage for energy commodities before extraction companies can take them to land.

Saipem’s yard project, which began in 2008, was the first major project in Indonesia’s free trade zone, which covers Bintan , Batam and Karimun islands.

“We searched for the best site in Southeast Asia,” Michel Laine, Saipem’s Indonesia country manager, said at the inauguration. “We think Karimun is the best place because it’s part of the FTZ [free trade zone], and the government has supported us to move quickly with the project.”

As part of a government effort to boost direct foreign investment in Indonesia, the free trade zone has received special treatment since 2009.

Manufacturers on the three islands are not required to pay certain taxes and import duties.

Several senior Saipem executives and government officials attended the inauguration, including, Muhammad Sani, the governor of Riau Islands; Widjajono Partowidagdo, a deputy at the Ministry of Energy and Mineral Resources; and Hardiono, deputy to the head of upstream oil and gas regulator BP Migas.

Hardiono said the yard could help industry contractors explore more oil and gas blocks in the offshore area, despite the trend of declining oil production.

Most producing blocks are currently far from shore, he said, and their productivity has declined gradually.

He said exploration activity in the deep sea could improve hopes of oil discovery.