Funding for gas project

Funding for gas project

PERTH (Reuter): Energy Equity Corp Ltd said yesterday it and partner Tenneco Inc had accepted a US$170 million underwriting offer for the development of their Indonesian gas project.

EEC said in a later statement that the underwriting offer for the Sengkang gas and power project in South Sulawesi was for US$179 million and had been made by Barclays BZW and Union Bank of Switzerland.

EEC managing director Maurice Brand said the offer represented 80 percent of the total US$225 million of capital costs.

Tenneco Energy was currently funding the project under a joint venture agreement with EEC.

He said the funding agreement allowed the joint venture to issue a go-ahead notice for construction of a 135 megawatt plant and transmission line with ABB Power Generation.

The gas would be supplied from June 1997 by a 29 km pipeline from the Sengkang gasfield which had proven and probable reserves of 535 billion cubic feet (bcf). Of this, 156 bcf was committed to the power plant.

Brand said the joint venture had a 25 year production sharing contract for the gasfield. An Indonesian company, PT Rabana, had been awarded the contract for the pipeline.