Conoco awards US$1.6b contracts

Conoco awards US$1.6b contracts

HOUSTON (Dow Jones): Conoco Inc., under its South Natuna Sea
Block B Production Sharing Contract with Indonesian state oil and
gas company Pertamina, awarded two engineering, procurement,
construction and installation, or EPCI, contracts for the $1.6
billion Belanak offshore natural gas development.

In a press release Thursday, the energy company said it
awarded a US$587 million contract for a floating production,
storage and offloading, or FPSO, unit to PT Brown & Root
Indonesia and awarded a $157 million contract for two wellhead
platforms and associated pipelines and oil offloading buoy to PT
J. Ray McDermott Indonesia.

The EPCI contracts support two separate natural gas sales
agreements, both supplied by the Conoco-operated South Natuna Sea
Block B PSC.

The first natural gas sales agreement is a 22-year contract
between Pertamina and Singapore's SembCorp Gas for the long-term
delivery of natural gas to Singapore.

The second agreement is a 20-year contract between Pertamina
and Malaysia's state oil and gas company Petronas for the
delivery of natural gas to Malaysia.

With expected ultimate production of about 600 billion cubic
feet of natural gas, and 100 million barrels of oil, condensate
and liquefied petroleum gas, or LPG, Belanak is the cornerstone
for supplying future natural gas under both agreements, and for
the development of extensive reserves of liquids in the South
Natuna Sea Block B PSC.

The Belanak FPSO will process up to 350 million cubic feet of
natural gas a day for export, up to 100,000 barrels of oil and
condensate a day, and up to 23,000 barrels of LPG a day.

The 1,000-foot vessel will have the capacity to store up to
one million barrels of oil, which will be off-loaded to tankers
for onward transportation.

It will be installed and ready for production in late 2004.