Auction of E.Kalimantan-C.Java gas pipeline will take time: PGN

State owned gas distribution company PGN has insisted that it should be allowed to handle the construction of the inter-island gas pipeline linking East Kalimantan and Central Java in order to speed up the implementation of the project, Investor Daily reported on Monday.

PGN's general affairs director Sutikno said in Jakarta at the weekend that it would take at least 12 months for the government to prepare and process the tender of the project alone. "The 12-month for auction process will be too long for such crucial project which is needed to cope with the serious shortage of the gas supply in Java," he added.

Sutikno said that if PGN was allowed to handle the project, it would be able to begin it immediately. "We have prepared the project for at least three years," he said, adding that the company had formed a consortium with PLN, and fertilizer firms Pupuk Kaltim and Pupuk Pusri to jointly handle the construction of the inter-island pipeline.

PGN has asked the government for the company to be in charge of the construction of the East Kalimantan-Central Java gas pipeline which will cost between US$1.3 billion and US$1.5 billion to build. But the government's regulatory body for oil and gas downstream industries BPH Migas said that the pipeline project should be auctioned. (*)