Bakrie to go ahead with Kalimantan-Java gas pipeline project
Monday, June 11 2007 - 04:32 AM WIB
PT Bakrie and Brothers has been allowed to go ahead with its
Tubagus Haryono, the head of the regulatory body for oil and gas downstream industry BPH Migas, said in
"The project will continue, and there is no plan to revoke the contract," he said.
According to the company's reports, Tubagus said, a number of preparatory works have taken place including the funding and the land clearance for the project. A number of financial institutions including Mitsui, Mizuho, Deutsche Bank, and CINB have agreed to provide funds amounting to US$1.26 billion to finance the project, or about 70 percent of the total funding requirement. The other 30 percent of the funds will be provided by the company.
Bakrie would provide about US$400 million which would be used to procure pipes and to finance the construction works. "The company will submit the full reports by the end of this month," he added.
Tubagus said that the government would issue an exclusive right to transmit the gas through the pipeline as soon as the project is completed. Under the exclusive right, Bakrie will receive a fee from the gas being transmitted through the pipeline.
Bakrie won the tender to build the pipeline in July, last year, outbidding two other companies PT Rekayasa Industri and PT Barata. However, Bakrie is required to find the gas supply for the pipeline.
BPH Migas earlier said that it would review the contract because the company had difficulties in finding the sources of the gas for the pipeline in