By YEHIURA HRIEHWAZI in Brisbane
JAPAN’s integrated steel makers are confident of winning the multi-billion kina contract to supply pipes for the construction of natural gas pipeline from the Highlands to the planned Port Moresby LNG processing plant.
With the final investment decision (FID) scheduled today, the Japanese appear to be acting on “inside” information that the project is set to get the clearance to proceed.
Information made available to The National by the steel and allied metals industry yesterday indicated that “Japan’s integrated steelmakers will win contracts in early this month”.
Three of Japan’s big steel manufacturers will supply the pipes, namely Sumitomo Metal Industries Ltd, Nippon Steel Corp and JFE Steel Corp.
They will supply a total of 300,000 tonnes of UO pipes to run over 700km from the HelaTari gas region in Southern Highlands through the Gulf and Central provinces and into Konebada outside Port Moresby.
Tenders for the supply of steel pipes were called last year and the three Japanese companies were also among companies that submitted tenders along with three Malaysian companies, of which two are specialised in coating the pipes and could be given the contracts to work alongside the Japanese suppliers.
The report said the three Japanese integrated steelmakers made separate offers to the tender.
Under the existing circumstances, there is a strong possibility that the Japanese steelmakers will get the whole orders for the UO pipes required, in which Sumitomo is expected to account for 170,000 tonnes, Nippon Steel nearly 100,000 tonnes and JFE Steel 33,000 tonnes.
Indications are that Nippon Steel’s UO pipes will be used in the onshore section of the gas pipeline, Sumitomo Metal’s in the submarine section and JFE Steel’s in the deepest of the submarine section.
“PNG’s gas pipeline project represents the largest in Asia this year. Besides, new pipeline projects in Australia and Scandinavia are on track to final settlements between yearend 2009 and early 2010.
“As a result, UO pipe supply negotiations are perking up in the world’s various nations,” the report said.
“As matters now stand, it is likely that the three Japanese steelmakers will succeed in working out rolling plans to meet their UO pipe production in the first half of next year if they can promote negotiations smoothly on their UO pipe exports to the world’s destinations,” the report said.