PGN signs pipeline EPC contract with Nippon Steel, Tomen

State gas distribution firm PGN on Friday signed EPC contract worth US$144 million with Japan?s Nippon Steel Corporation to develop 105 km, 32 inches offshore gas pipeline from Labuhan Maringgai in Lampung province to Cilegon in Banten province.

Nippon Steel, according to a PGN release, will work in consortium with another Japanese firm Tomen Corporation.

The pipeline segment is part of 450-km South Sumatra-West Java Phase 1 (SSWJ I) pipeline project development, which will transport gas from South Sumatra to Western part of Java. PGN is developing two parallel pipelines from South Sumatra to West Java.

Physical works would commence February 2006 with completion expected March 2007.

SSWJ I, which is funded with soft loan from Japan?s JBIC would be able to transport 600 MMCFD of gas. During the first years of operations it would transport 250 MMCFD of natural gas from Pertamina?s South Sumatra gas fields. PGN had also contracted to buy gas from ConocoPhillips-operated Corridor Block onshore South Sumatra.

Last week PGN also signed EPC contract with JFE Engineering to build 270 km onshore pipeline from Pagar Dewa in South Sumatra to Labuhan Maringgai.

PGN Corporate Secretary Widyatmiko Bapang said EPC winner for the remainder segment of the pipeline; Cilegon-Serpong pipeline, would be announced shortly. (godang)