Saipem gets the ball rolling on BP’s $7 billion integrated project off Indonesia

August 13, 2025, by Dragana Nikše

Italy’s engineering, drilling, and construction services giant Saipem has held the first steel-cutting ceremony for an integrated project operated by the Indonesian subsidiary of the U.K.-headquartered energy giant BP at its fabrication yard in Karimun, Indonesia.

An aerial view of Tangguh LNG plant; Source: BP

The ceremony marked the official start of construction activities for the Tangguh UCC project located in Papua Barat province, Indonesia. The project entails the extension of gas feed to BP’s existing liquefied natural gas (LNG) facility – Tangguh – through the development of the Ubadari gas field, whose production is anticipated to start in 2028.

The integrated project encompasses the production of natural gas resources from Ubadari and its transportation to an onshore LNG plant, where it will undergo a CO2 separation process.

Afterward, the captured CO2 will be sent into an offshore platform for re-injection into the reservoir, helping to unlock around 3 trillion cubic feet of additional natural gas resources from Ubadari.

*Tangguh UCC project steel-cutting ceremony; Source: Saipem*

Saipem’s scope of work entails the engineering, procurement, construction and installation and commissioning of two wellhead platforms, a CO2 reinjection platform, and approximately 90 kilometers of associated pipelines, cables, and tie-in to existing brownfield facilities.

The project is operated by a consortium led by BP under a production sharing contract (PSC) with SKK Migas, Indonesia’s upstream oil and gas regulator. The British major holds a 40.22% interest, with partners MI Berau (16.30%), CNOOC Muturi (13.90%), Nippon Oil Exploration (Berau) (12.23%), KG Berau Petroleum (8.56%), KG Wiriagar Petroleum (1.44%), and Indonesia Natural Gas Resources Muturi (7.35%).

Shortly after BP and its consortium partners reached a final investment decision (FID) for the project, Saipem and its consortium partner PT Meindo Elang Indah emerged as the preferred offshore engineering, procurement, construction, and installation (EPCI) contractor in November 2024.