Santos Ltd has approved the development of the Wortel gas project in Indonesia for an estimated $US100 million ($A101.91 million).
First gas is expected from the project, offshore from Madura Island in East Java, by the end of 2011.
Wortel will be developed as a tie-back to the existing Oyong oil and gas field, operated by Santos.
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Gross production rates from the combined Oyong and Wortel fields are expected to be about 90 million standard cubic feet of gas per day (mmscf/d) at plateau production.
Oyong currently produces about 60 mmscf/d gross of gas and 3,500 barrels per day gross of oil.
Both Wortel and Orong are projects undertaken by the Sampang PSC joint venture, which is 45 per cent held by Santos and 40 per cent by Singapore Petroleum Company, while Cue Energy Resources has the remaining 15 per cent interest.
Shares in Santos were up fove cents at $12.38 at 1458 AEDT while Cue shares were steady at 38 cents.