Bakrie offers lowest tariff in tender for gas pipeline project

PT Bakrie & Brothers offers the lowest gas transmission tariff in a tender for the development of the East Kalimantan- Central Java gas pipeline project. The proposed tariff was revealed when BPH Migas opened Thursday bidding documents submitted by three contenders including state-owned gas distribution company PGN, PT Barata Indonesia, and Bakrie, Investor Daily reported in its Friday edition.

Bakrie offered a gas transmission tariff of US$0.76 per MMBTU, while PGN offered US$0.98 per MMBTU, and Barata US$1.1 per MMBTU. Bakrie is a diversified business group linked to the Coordinating Minister for People?s Welfare Aburizal Bakrie.

BPH Migas, the country?s oil and gas downstream regulator, plans to announce the winner for the US$1.2 billion gas pipeline project next week. BPH Migas chairman Tubagus Haryono said that transmission tariff was not the only criteria used by the agency to select the winning bidder. He said that BPH Migas was still finalizing the weighting for each criteria.

The 1,219-km pipeline is designed to transmit natural gas from East Kalimantan to Semarang in Central Java to meet growing demands in Java. The pipeline is expected to begin operation in 2009.(*)