Amerada moves to develop Ujung Pangkah

Amerada moves to develop Ujung Pangkah

Amerada Hess Co., and partner ConocoPhillips, signed two major
construction contracts on Friday to signal the start of major
investment to develop the Ujung Pangkah gas block in East Java --
where the two global energy giants act as the operator.

The combined contracts are worth about US$110 million, a press
statement said.

"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," Amerada Hess
President and General Manager in Indonesia Colin Munro said in
the statement.

About $60 million of the deal will be spent procuring goods
and services in Indonesia.

The two deals have been awarded to Indonesian companies for
the engineering, procurement, construction and installation
(EPCI) of the facilities to produce, process and supply gas from
the field to, among other consumers, state power utility PT
Perusahaan Listrik Negara (PLN)'s power generation plant at
Gresik.

The first contract, awarded to a consortium of construction
firms PT Raga Perkasa Ekaguna (RPE) and PT PAL Indonesia, covers
the provision of offshore facilities consisting of an unmanned
well head platform and a 42-kilometer export line.

The second contract, awarded to PT Inti Karya Persada Teknik
(IKPT), covers the provision of onshore processing facilities and
the gas pipeline onward to PLN gresik.

State gas distributor PT Perusahaan Gas Negara (PGN) is also
in talks with the operator to purchase about 100 million standard
cubic feet per day (mmscfd) to supply small and medium
enterprises (SMEs) in the province. -- JP