5 firms bid for E. Kalimantan to Java pipeline project

Downstream oil and gas regulator BPH Migas said 5 companies have submitted proposals to develop the controversial 1,200-km East Kalimantan to Java gas pipeline segment.

BPH Migas Natural Gas Director Nafrizal Sikumbang told Petromindo.Com Thursday that the five bidders are state gas distribution firm PGN, Bakrie & Brothers, Barata Indonesia, Bumi Kharisma Lini Nusa and Alfa Karsa Persada. Bakrie is a company controlled by conglomerate cum minister Aburizal Bakrie family.

Sikumbang said the bidders were expected to submit pricing proposal late April, with winner to be announce late May this year.

The controversial project is expected to transport 1BCD of East Kalimantan gas to industrial island of Java. The project, which is initially initiated by PGN, draws controversy as some industry players consider the transportation costs would be much higher compared to constructing LNG receiving terminal in Java. The plan also draws controversy as gas source is Kalimantan is currently limited, and any attempt to supply gas to Java will have to sacrifice LNG export, which is sold at much higher price than that of domestic price. (godang)