Santos, PAL sign EPCI onshore processing facility contract

State owned shipbuilder PT PAL Indonesia has signed a Engineering, Procurement, Construction and Installation (EPCI) contract with Santos (Sampang) Pty Ltd. for the construction of an onshore gas processing facility in Grati, East Java.

The contract estimated to be worth about US$20 million was signed by Santos's general manager Eko Lumadyo and PT PAL president director Harsusanto in Surabaya on Tuesday.

The construction project is expected to be completed in 15 months, Eko said.

This project is part of the Phase 2 development of Oyong field, which is located in Sampang PSC.

First gas production was anticipated in the first half of 2009.

Santos has signed a gas sales agreement with state owned power plant operator PT Indonesia Power, with gas to be piped via a 55 kilometer pipeline to an onshore processing facility adjacent to the Grati power station in East Java.

Santos is the operator with 45 percent interest in Sampang PSC. (godang)