BPH Migas awards pipeline development right

Downstream oil and gas regulator BPH Migas on Wednesday declared state oil and gas company Pertamina and State engineering firm PT. Rekayasa Industri winners for special right to develop and operate two pipeline segments that will connect East Java to West Java.

The first Gresik-Semarang 250-km pipeline section is given to state oil and gas company Pertamina, which offered toll fee of 25US cents per MMBTU and the 230-km Semarang-Cirebon section was given to Rekayasa Industri which offered toll fee of 36 cents per MMBTU, BPH Migas Committee member Ramlan Ginting told Petromindo.com.

Rekayasa, which is backed by state owned bank BNI will spend US$170 million on the project while Pertamina, baked by BNI and BNP Paribas, will spend $180 million.

The two companies will be given 25-years right to operate the pipeline segments. The pipeline is part of national pipeline grid that was planned to connect the islands of Sumatra, Java and Kalimantan.The pipeline will e designed to flow 350-500MMCFD of gas.

Five companies including state gas distribution firm PGN, Bakrie Pipe Industries and PT. Moeladi.

BPH Migas official Nafrizal Sikumbang said the pipeline was expected to be completed in 2009.

BPH Migas chairman Tubagus Haryono earlier said that the agency is preparing tender for 220-km Cirebon-Bekasi segment with bid submission planned June. (godang)