Consortium to start gas project at once

Consortium to start gas project at once

CALGARY (Reuter): Gulf Canada Resources Ltd and Talisman Energy Inc said that construction of the Corridor Block Gas Project in South Sumatra, Indonesia would begin immediately.

The companies said a consortium comprising PT Pertafenikki Engineering, JGC Corp. and Willbros Far East Inc. was contracted to build the gas plant and related field facilities for the US$600-million project.

They said Wednesday the recent signing of the Early Work Contract was expedited by strong support from participants, which include the Indonesian government, state oil company Pertamina, the Asian Development Bank and Perum Gas Negara.

Under the plan, state-owned PGN would build and operate a 540- km gas pipeline to the Duri steamflood and a 280-km spurline to Batam Island.

The Asian Development Bank, which underwrote the project's loan, and PGN also agreed on a list of approved pipeline contractors that may bid on the Duri pipeline project, they said.

The Corridor project was designed to produce about 300 million cubic feet per day of natural gas.

First sales of 80 million cubic feed per day are scheduled for mid-1998, with full shipments starting in late 1998.

About 270 million cubic feed per day would go to Duri, where it would displace up to 45,000 barrels per day of crude oil currently used to generate steam for enhanced oil recovery.

The displaced crude oil would be received as payment for Corridor gas.

The remaining gas would be transported to Batam for power generation, fetching prices equivalent to those at Duri.

Capital costs in 1996 were expected to total about US$77 million, the companies said.

Gulf unit Asamera (Overseas) Ltd has a 54 percent interest in the Corridor Block PSC and is operator. Talisman subsidiary Talisman (Corridor) Ltd has a 36 percent stake and Pertamina has 10 percent.