Bakrie offers toll fee of 37 cents to transport Kepodang gas to Tambak Lorok

Bakrie Group has submitted formal offer of US 37 cents per MSCF toll fee to transport gas from Petronas-operated Kepodang field in Muriah PSC, East Java to Tambak Lorok power plant in Central Java owned by state electricity firm PT PLN (Persero), an official with downstream oil, gas regulatory body BPH Migas said on Monday.

?It?s now up to the Minister of Energy and Mineral Resources whether the pipeline would be developed downstream scheme,? he said, adding that according to BPH Migas? calculation, developing the pipeline under downstream scheme would give more advantage to the government than letting Petronas developing the pipeline under upstream scheme.

Under the downstream scheme, Petronas would be exempted from investing money to develop the pipeline and would only be subjected to pay toll fee, whereas in upstream scheme it would have to pay for the construction of the pipeline, which it would reclaim later to the government under cost recovery rule.

Last week BPH Migas Chairman Tubagus Haryono said that upstream oil, gas authority BPMIGAS, Director General of Oil and Gas and BPH MIGAS have agreed to give recommendation to the Minister of Energy and Mineral Resources that the 200-km pipeline would be built using downstream scheme, potentially reversing earlier decree issued by the Minister that the pipe be built by Petronas using upstream scheme.

Bakrie Group through its unit PT Bakrie Indo Infrastucture, which had been awarded right to develop Kalimantan to Central Java pipeline, contested decision that the pipeline segment would be developed under upstream scheme by Petronas, arguing that the Muria-Kepodang segment was part of Kalimantan to Central Java pipeline.

The decision would mean that Petronas or PLN would have to pay toll fee to use the pipeline. Petronas is contracted to supply 200 MMCFD from Kepodang field in Muriah block to Tambak Lorok for 10 years.

Earlier, BPMIGAS Deputy Chairman Hardiono said that developing the pipeline under downstream scheme would mean project delay of about one year as additional equipments must be installed at the well head. (bernard)