BPH Migas may give Rekayasa right to build pipeline to replace Pertamina

Downstream oil and gas regulatory body BPH Migas may cancel appointment of state oil and gas company Pertamina as winner of right to develop Gresik-Semarang gas transmission pipeline after Pertamina failed to secure cooperation from state railway firm PT.KAI to use the track for the planned pipeline, BPH Migas official said on Thursday.

Chairman Tubagus Haryono said BPH Migas might give the right to PT. Rekayasa Industri, a state owned firm, which was the second place bidder. ?This will be decided on Friday (July, 28, 2006) committee meeting,? he said.

He said Pertamina was declared winner last March after offering toll fee of 25 US cents per MMBTU. Rekayasa was in second place with 41 cents per MMBTU.

Tubagus said PT. KAI refused to cooperate with Pertamina as it was already in cooperation with Rekayasa.

The failure to clinch KAI cooperation makde Pertamina requested for investment calculation revision and toll fee change, which is unacceptable by BPH Migas.

Tubagus ruled out the possibility of re-tendering, saying that the process would take too much time.

On March 2006 BPH Migas awards Pertamina for special right to develop and operate Gresik-Semarang 250-km pipeline section. The pipeline is part of national pipeline grid that was planned to connect the islands of Sumatra, Java and Kalimantan. The pipeline will be designed to flow 350-500MMCFD of gas. (godang)