ASSET INTEGRITY DOC. NO. REV.

PROGRAM AIP-NCP-GEN-EVA-AEN-0000X-00 A

Project : DATE: August 13, 2014 PAGE : 1 OF 6

North Corridor Project PREPD Hardianto HHMI
CHKD Robert Hutapea RXZI
CPDEP PH 3
APPD Pramudyana Agus PRGS

PIPE MILLS ASSESSMENT REPORT

REV DATE PAGES DESCRIPTION PREPD CHKD APPD

A01 Aug 13, 2014 ALL ISSUED FOR USE HHMI RXZI PRGS
Table of Contents

1. INTRODUCTION....................................................................................................

1.1 BACKGROUND.......................................................................................................

1.2 OBJECTIVE............................................................................................................

2. EVALUATION AND ASSESMENT...........................................................................

2.1 SUMMARY..............................................................................................................

2.2 VENDOR INVITATION...........................................................................................

2.3 COMPANY PROFILE..............................................................................................

A. PT. BAKRIE PIPE INDUSTRIES........................................................................

B PT. KHI PIPE INDUSTRIES................................................................................

C. PT. MARUBENI-ITOCHU TUBULARS ASIA (MITA).........................................

2.4 PRODUCTION FACILITIES....................................................................................

2.5 SHIPPING & PACKAGING.....................................................................................

2.6 PRODUCTION FORECAST..................................................................................

3. RECOMMENDATION...........................................................................................

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1. INTRODUCTION
a.1 Background

PT. Chevron Pacific Indonesia is presently working on development phase for all AIP Corridors. The
AIP Corridors is a project which has been established for the purpose of improving safety, security and
future operability & maintainability of pipeline, powerline and communication infrastructure within the
main shipping corridors of Chevrons Sumatra Operations.

PT. Chevron Pacific Indonesia plans to replace existing pipeline and powerline at all AIP Corridors. The
new pipeline and powerline will be designed according to government regulations, company
specifications, as well as international codes and standards. The unused facilities will be demolished
after new facilities put in service.

Therefore as part of the design assurance, PT. Chevron Pacific Indonesia needs to conduct an evaluation
to ensure the capability for each pipe mills.

a.2 Objective

This activity aims to ensure the capability of pipe mills to meet the requirements for AIP Project.

2. EVALUATION AND ASSESMENT

2.1 Summary

The Project team (PT. CPI and Tripatra Engineering) visited the Bakrie Pipe Indonesia (BPI) in Bekasi
east of Jakarta on Thursday 26 June 2014, and KHI Pipe Industri in Cilegon on Friday 27 June 2014.
The project team need to ensure the capability of pipe mill is meet project requirement for all AIP
Corridors. The data was collected base on discussion with the pipe mill company, site visit, brochure
and others reference. It divided into 5 categorized capability:

a. API 5L Gr B 30 DSAW/SAWL 0.5 WT for Tie-in at CPS Tank & API 5L Gr.B 28
DSAW/SAWL 0.164 WT for Pipe Casing
b. API 5L Gr.B 24 ERW 0.5 WT for Pipeline NCP
c. API 5L Gr.B 16 ERW 0.375 WT for NCP Pipeline Bangko - Batang
d. API 5L Gr.B 8 ERW 0.25 WT for BBC Pipeline Balam - Bangko
e. Carbon Steel 12& 8 galvanize 0.25- 0.375 WT for Power Pole

The Project team (PT. CPI and Tripatra Engineering) were invited other international supplies to their
give presentation and discussion, for this time we were invite (PT. Marubeni-Itochu Tubulars Asia) that

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 was based on Japan. This vendor can supply for all material type with competitive price, but local
content can be one of major issue as per government regulation.

Bakrie Pipe Marubeni-Itochu

DESCRIPTION KHI Pipe Industri
Industri Tubulars Asia
Pipe 30 DSAW/SAWL
Comply* Not Comply Comply
For Tie-in line at CPS Tank
Pipe 28 DSAW/SAWL
Comply* Not Comply Comply
for Casing Pipe

Pipe 24 ERW Comply** Not Comply Comply

Pipe 20 ERW Comply** Comply** Comply

Pipe 16 ERW Comply** Comply** Comply

Pipe 12 ERW Comply** Comply** Comply

Pipe 10 ERW Comply** Comply** Comply

Pipe 8 ERW Comply** Comply Comply

Power Pole 12 & 8 Comply Comply**** -

Coating facilities Comply** Comply Comply

Galvanize facilities Comply Not Comply -

Table 1: Vendor Capability Summary

* Mill plant location on Lampung not on Bekasi.

** Coating plant under construction, target finish end of 2014

*** Mill plant under construction, target finish end of 2014

**** Galvanize can be provided by others

2.2 Company Profile

a. PT. Bakrie Pipe Industries

Bakrie Pipe Industries is composed of several different pipe mills which includes a Longitudinal
DSAW facility (South East Asia Pipe Industries SEAPI) in Lampung South Sumatra, as well as the
main production facility in Bekasi which has mills capable of producing ERW and Spiral DSAW line
pipe.

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 The project team visited the Bekasi facility, with total area of 38 hectares located in Bekasi.
BPI operates 5 pipe manufacturing plants of different capabilities.
- High Frequency Resistance Welding ( HFRW)/ ERW 8 24 Inch
- High Frequency Resistance Welding ( HFRW)/ ERW 6 16 Inch
- High Frequency Resistance Welding ( HFRW)/ ERW 4 8 Inch
- High Frequency Resistance Welding ( HFRW)/ ERW 1 1/2 4 Inch
- High Frequency Resistance Welding ( HFRW)/ ERW 1/2 1 Inch
There are galvanize facility for 6 meter of length and there are new facilities to be built for coating
internal and external (expected finish end of 2014)

b. PT. KHI Pipe Industries

PT KHI is situated 100 km west of Jakarta and next to the port of Cigading. KHI has two locations of
mills, i.e. one mill for Line pipe and one mill for Coating. Both is located within Cilegon. The main
production facility in Cilegon has mill capable of producing Spiral SAW line pipe and ERW line pipe.
The project team visited ERW facilities and Coating Facilities.
KHI operates 2 pipe manufacturing plants of different capabilities.
- Spiral SAW Steel Pipe 12 80 Inch
- High Frequency Resistance Welding ( HFRW)/ ERW 4 12 Inch
There are Coating facilities for external coating, internal coating and concrete coating
KHI now is upgrading for ERW Mill (under construction, expected finish end of 2014) will be capable
of pipe up to 20 as high strength API Grade up to API 5L X80 Sour service

c. PT. Marubeni-Itochu Tubulars Asia (MITA)

PT Marubeni-Itochu Tubulars Asia was established in 2001 as part of a joint venture between two
Japanese corporation, Marubeni and Itochu. The resulting products are including line pipes, structural
steel, specialty pipes and OCTG ( Div 2). For Line Pipes, PT. MITA has capable for production
generally from NPS 8-26 for ERW and 18-56 for SAW.

2.3 Production Facilities

A. PT. Bakrie Pipe Industries

1. KT 30 (DSAW/SAWL Steel Pipe)

Diameter : 8 5/8 30 Inch

Thickness : 4.8 mm 15.9 mm

Design Capacity :

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Project Requirement : 24 ERW 12.7 mm WT comply with production rate 175 Joint/day

1. KT 24 (ERW Steel Pipe)

Diameter : 8 5/8 24 Inch

Thickness : 4.8 mm 15.9 mm

Design Capacity : 150,000 ton/Year

Project Requirement : 24 ERW 12.7 mm WT comply with production rate 175 Joint/day

2. WTM 16 (ERW Steel Pipe)

Diameter : 6 5/8 16 Inch

Thickness : 4.8 mm 12.7 mm

Design Capacity : 60,000 ton/Year

Project Requirement : 16 ERW 9.52 mm WT comply with production rate 185 Joint/day

3.WTM 8 (ERW Steel Pipe)

Diameter : 4 1/2 8 5/8Inch

Thickness : 2.9 mm 8.2 mm

Design Capacity : 30,000 ton/Year

Project Requirement : 8 ERW 6.35 mm WT comply with production rate 200 Joint/day

4. VAI-4 (ERW Steel Pipe)

Diameter : 1 1/2 4 1/2 Inch

Thickness : 1.5 mm 6.0 mm

Design Capacity : 40,000 ton/year

5. MM-1 (ERW Steel Pipe)

Diameter : 1/2 1 1/4 Inch

Thickness : 1.5 mm 3.6 mm

Design Capacity : 10,000 ton/year

6. Galvanizing Facility

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 Annual capacity of this facility is 15.000 tons and capable to process pipes up to 6-meter of length.

7. Coating Facility (under construction)*

- External Coating
- Internal Coating
* Commissioning Schedule in end of 2014

B. PT. KHI Pipe Industries

1. Spiral SAW Steel Pipe

Diameter : 12 80 Inch

Thickness : 3.2 mm 25 mm

Design Capacity : 150,000 Tons /Year

Project Requirement : 24 ERW 12.7 mm WT, Not comply

2. High Frequency Resistance Welding ( HFRW)/ ERW

1st line machine

Diameter : 4 12 Inch

Thickness : 3.2 mm 12.7 mm

Design Capacity : 70,000 Tons /Year

Project Requirement : 8 ERW 6.35 mm WT comply with production rate 200 Joint/day

2nd line machine

Diameter : 10 20 Inch*

Thickness : 4 mm 16 mm

Design Capacity : 150,000 Tons /Year

Project Requirement : 16 ERW 9.52 mm WT comply*

*Commissioning Schedule in end of 2014

3. Coating Facilities
A wide diameter range coating application from 4 up to 60.
Application proved by API 5L certification and ISO 9001: 2000.
Coating capacity up to (800,000 SQM/year)
External Coating
- External Liquid Epoxy Coating

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 - FBE Coating
- Three Layer Polyethylene System (3LPE)
- Three Layer Polypropylene Tape System (3LPP)
- Concrete Weight Coating
- Asphalt Enamel Coating
Internal Coating
- Internal Liquid Epoxy Coating
- Cement Mortar Lining

C. PT. Marubeni-Itochu Tubulars Asia (MITA)

Generally, PT MITA can supply a wide size-range of line pipe at large quantities with the capability of
the mill sources in various countries. Products such as UOE Pipe (Straight Seam Double Submerged Arc
Welded Pipe), High Frequency Welded (HFW) Pipe, Seamless Pipe (SMLS), Corrosion Resistance Claded
Pipe and Weldable 12% Chrome Line Pipe and external coating requirements are available for various
special services i.e. Offshore and Sour Gas. Main production facility in Tokyo, Japan. Major mills partner
and other sourcing capabilities as shown below.

Table 2: Major Mill Partner

Generally, Major Mill Partner establish from Japan Company. Major Mill Partnet

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 Picture 1: Other Sourcing Capabilities

2.4 Shipping & Packaging

The pipe will be delivered by supplier/vendor using vessel or barge following Company schedule. No
special package is required during shipping to Dumai.

BPI and KHI noted that it is uncommon practice to supply timber word dunnage for stacking on
Company storage yard. Dunnage to be used on shiping will be provided by the vessel, but it will not
be for Company consumable. The dunnage for Company storage yard will be supplied by BPI and
KHI upon request with additional price. Steel pipe cap will be used as bevel protector for 6 pipe and
above, while plastic cap for below 6 pipe.

The shipping duration to Dumai approximately takes 7-10 days. KHI has advantage that they have
own port. BPI and KHI undertake to supply material from the mill to CPI Dumai Warehouse via
Dumai Public Port, though they have preference to supply the material to Dumai Public Port as current
usual business (trailer availability which complies with CPI regulation during working at CPI
premise). In case it requires to deliver the pipe using of dedicated barge, KHI has preference to
unloading the pipe in CPI Dumai Wharf instead of Dumai Public Port.

As part of delivery manifest, BPI and KHI will equip the material with original mill certificate of the
product.

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2.5 Production Forecast

Based on current production plan, both BPI and KHI informed that they have not still received any
order yet for the production in year of 2016.

3. RECOMMENDATION

Based on a comparison between the two mills visited and one international mill representative invited,
project team recommends as below:
a. PT. BPI be considered for 28 and 30 DSAW/SAWL.
b. PT. BPI be considered for 24 and 16 ERW line with FBE coating provided by others.
c. PT. KHI for 8 ERW line completed with FBE coating and Carbon Steel 12& 8 galvanize for
power pool.
d. PT. MITA can supply for all material type with competitive price, but local content can be one of
major issue as per government regulation.

ATTACHMENT A

Attendance list at KHI

Attendance list at Bakrie Pipe Industri

ATTACHMENT B

KHI Brochure

Bakrie Pipe Industri Brochure

ATTACHMENT B

MITA Brochure

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