BPH Migas warns Bakrie over gas pipeline

Downstream Oil and Gas Regulating Body BPH Migas will review the status of Bakrie & Brothers Tbk?s special right to build East Kalimantan-Central Java gas pipeline project.

BPH Migas chairman Tubagus Haryono said that Bakrie must complete several programs as mentioned in the bid offer. Tubagus emphasized that Bakrie can?t delay the project because of lack of gas supply.

?Based on the letter (of BPH Migas), the project must begin in July 2007,? Tubagus said at the House of Representatives building in Jakarta on Tuesday.

Earlier, Bakrie & Brothers director of finance Yuanita Rohali said that the company is still waiting for the gas balance plan. It is also hoping that the government will provide certainty in the availability of gas.

?When we participated in the tender, we received the data from Upstream Oil and Gas Regulatory Body, BP Migas, that there is 25 trillion cubic feet (TCF) of gas reserves in Kalimantan,? Yuanita said on Jan 27, 2007.

Based on the tender document proposed to BPH Migas, four banks are ready to lend loan, including Deutsche Bank, Sumitomo Mitsui Banking Corp, Commerce International Merchant Bankers Berhad and Nizuho Corp Bank Ltd.

The company is now in talk with Ernest & Young (E&Y) on the possibilities of financing schemes for the project that will cost around US$1.26 billion, Bakrie & Brothers president director Bobby Gafur Umar said Dec 14, 2006. (godang)