AGO investigating suspected corruption in FSRU Lampung
Tuesday, March 8 2016 - 03:10 PM WIB
The Attorney General?s Office (AGO) is investigating suspected corruption in the procurement process of Floating Storage and Regasification Unit (FSRU) Lampung owned by IDX-listed state controlled gas distribution firm PT Perusahaan Gas Negara Tbk (PGN).
The AGO sent a letter to PGN?s President Director Hendi Prio Santoso on Feb. 25, summoning five executives of the firm for questioning.
The five people are Agoes Krenowo (Secretary of Procurement Committee), Tri Setyo Utomo (Assistant Manager of Project Finance and Administration), M Wahid Sutopo (Director of Investment Plan and Risk Management), Eri Surya Kelana (Director of Finance and Administration) and Retno Kadarini (Head of Procurement Committee)
The letter said the five were summoned ?in line with investigation into corruption case related to the FSRU development owned by PGN? with reference to Investigation Order from Solicitor General for Special Crime No. Print-11/F.2/Fd.1/02/2016 dated Feb. 23 signed by Dr. Fadil Zumhana.
?We hereby ask for your help to forward this letter of summoning to the aforementioned names,? reads the letter.
Earlier, the AGO announced that it discovered indications of corruption in the US$400 FSRU Lampung project. There are indications that the project?s costs have been marked up. Losses are estimated to reach $100 million as a result of underperformance of the facility. Despite the underperformance of the facility, PGN has to pay Hoegh LNG, a Norwegian firm which owns FSRU Lampung, $6 million in monthly leasing fee.
Suspicion over possible corruption in the FSRU Lampung project came into surface following a report from Energy Watch Indonesia, a local NGO, which alleges the state might have suffered losses due to the lack of risk management in the development of the project.
The FSRU was initially planned to be stationed at Belawan, the seaport of North Sumatra province, in 2011, to provide gas for the province. Then Minister of State Enterprises Dahlan Iskan suspended the project, while ordering state owned oil and gas firm PT Pertamina to build a pipeline from Aceh to supply gas to North Sumatra. The Arun-Belawan pipeline has been completed and is now in operation.
In 202, Dahlan ordered PGN to relocate its FSRU project to Lampung. The FSRU was completed in two years. In September 2014, FSRU Lampung started channeling gas to PLTGU Muara Tawar power plant in Bekasi, West Java province, owned by public utility PT Perusahaan Listrik Negara (PLN) at a volume of 40.5 mmscfd and a price of $18 per mmBtu
The contract with PLN was however terminated in January 2015. Despite the absence of revenue, PGN has to continue paying leasing and maintenance fee of FSRU Lampung.
Besides, PGN has also spent $100 million to build a mooring tower for the FSRU and another $150 to build a 30-50 km subsea pipeline linking FSRU Lampung to the South Sumatra-West Java pipeline and offtaking supporting facilities. The prices are considered too high.
Editing by Johannes Simbolon