Amerada Hess awards US$110 million contracts for Pangkah gas project

Amerada Hess, the operator of the Pangkah PSC, awarded on Friday two major contracts worth a total of US$110 million for the construction of facilities of the Ujung Pangkah gas field located in the Madura Strait offshore East Java, according to company statement.

Amerada said the first contract covering the construction of offshore facilities consisting of an unmanned well head platform and a 42-km pipeline was awarded to a consortium of Raga Perkasa Ekaguna (RPE) & PT. PAL Indonesia.

Meanwhile, the second contract, which is granted to Inti Karya Persada Teknik (IKPT), covers the construction of onshore processing facilities, to be located at the Maspion Industrial Estate, Gresik, and the gas pipeline to state-owned electricity firm PT PLN's Gresik power plant.

?The majority of the value of these contracts, approximately $60 million, will be spent procuring goods and services in Indonesia,? Amerada said, adding that the fabrication of both the platform jacket and topsides will take place in PT PAL yard, Surabaya.

Amerada has signed a 20 year gas supply contract with PT PLN for the supply of at total of 440 billion cubic feet of gas at a plateau rate of 100 million cubic feet of gas per day to PLN?s 2,200 MW Gresik power plant. First gas is expected to be delivered at the end of 2006.

?Ujung Pangkah represents an exciting new investment for us as we build the basis of a long term business in Indonesia. The project will provide a significant economic boost to industry in the region and, ultimately, provide a reliable and cost effective source of energy for the local area,? Colin Munro, Amerada Hess President and General Manager in Indonesia, said in the statement.

Amerada holds a 78 percent of working interest in the Pangkah PSC, while the remaining is held by ConocoPhillips. (Robert)