PGN signs pipe supply contracts for S.Sumatra-W.Java project

State gas distribution firm PGN on Thursday signed more than US$100 million contracts for procurement of coated pipe and fully welded ball valve for the construction of South Sumatra-West Java (SSWJ) Phase II gas pipeline.

Indonesian pipe producer PT.KHI Pipe Industries secured 39km 28 and 32 inches pipe supply contract worth $15 million and Rp.29 billion (US$=Rp.10, 300). KHI is a subsidiary of state owned steel maker PT. Krakatau Steel.

Indian pipe producer Welspun Gujarat Stahl Rohren ltd. was awarded 200km pipe procurement with 36-inch diameter worth US$92 million and Rp.195 billion. The pipe supplied by Welspun would be installed in Grissik-Pagardewa line. Welspun is partnering with local firm PT.Abadi Kuasa Karya.

Local firm PT. Multi Superindo Manunggal bagged $3 million fully welded ball valve contract. The company would supply 50 units of valve.

PGN corporate secretary Widyatmiko Bapang said that with the signing of the contracts, PGN had secured all onshore pipe requirements for SSWJ Phase II project.H said that construction work would commence November 2006 for South Sumatra side, while construction works for West Java would commence January 2006.

First gas from South Sumatra to West Java is expected November 2006. The SSWJ Phase II pipeline would transport gas from ConocoPhillips? South Sumatra gas fields to Western part of Java industrial customers.

According to PGN?s earlier statement, SSWJ Phase II pipeline would have the capacity to transport 500 MMCFD of natural gas.

PGN is constructing two pipelines connecting Sumatra and Java islands in order to support higher demand for natural gas in West Java. The SSWJ Phase I is dedicated to transport natural gas from Pertamina?s gas field to PGN?s industrial customers in the western part of West Java. SSWJ Phase I is slated to be completed in 2007.

When both pipelines are completed, it would be able to transport some 1 BCFD of gas to the gas-hungry western part of Java. (godang)