Cancellation threat haunts E. Kalimantan-C. Java gas pipeline project

The gas pipeline project connecting East Kalimantan with Central Java will likely be canceled. Because, there is no explanation until this day about the source of gas supply for the 1,219 km-long pipeline project, the Media Indonesia newspaper reported in its Tuesday edition.

?As long as it is not clear about the gas supply for the pipeline, it is very difficult for the realization of the project,? state owned gas distributor PT Perusahaan Gas Negara (PGN) president director WMP.Simandjuntak said in Jakarta on Monday after a hearing with the House of Representatives? Commission VII.

Simandjuntak asserted that the project will not be built if there is no gas sales agreement(GSA) with the gas producers.

?Though the special auction right will be in the hands (of PGN) soon, there is no guarantee that the project will be materialized,? he said.

According to Simandjuntak, if the East Kalimantan-Central Java gas pipeline project is canceled, PGN will lose nothing. On the contrary, the government must find a way out how to meet the gas demand on the Java Island. Because, currently, there is a shortage of 3,607 mmscfd of gas on Java Island. (*)