AWE says due diligence to acquire S. Sumatra LPG project ongoing

ASX-listed firm Australian Worldwide Exploration Limited (AWE) said on Tuesday that due diligence to acquire stake in South Sumatra LPG extraction project is still ongoing.

The company is planning to acquire 90 percent equity interest in PT Ogspiras Basya Pratama (OBP), a company that is developing a liquid petroleum gas (LPG) extraction project near Palembang in South Sumatra.

?Progress on the completion of the due diligence has been slower than anticipated. Finalization of the transaction remains condition on the satisfactory completion of the diligence process and the receipt of the regulatory approvals,? said the company in a statement.

If the acquisition were successful AWE would fund 100 percent of the remaining capital expenditure for the project, which is currently under construction.

OBP has negotiated a 15-year agreement with state-owned oil and gas firm PT Pertamina for the purchase of raw feed-gas at the flow rate of 60 MMCFD for the LPG plant. The project is adjacent to Pertamina?s major South Sumatran gas pipelines.

Gross liquid sales from the plant are estimated to be in excess of 1.6 million barrels plus over 500,000 tons of LPG throughout the 15-year project life. (alex)