Companies to obtain licenses for gas distribution, pipeline construction

BPH Migas, the government's agency responsible for oil and gas downstream activities, will soon issue licenses to a number of companies to build gas pipelines and to sell gas in certain areas in the country, Media Indonesia reported on Saturday.

The chief of the agency Tubagus Haryono said in Jakarta on Friday that the licenses to distribute or sell gas in certain areas would be given to state owned gas distribution company Perusahaan Gas Negara (PGN) and PT Transgasindo, while the rights to build a gas pipeline in certain areas would be given to PGN, Igas and PT Energasindo Heksa Karya.

He said that the licenses would be formally given later this month and from this month, the rights to sell gas and to provide gas pipelines in certain locations would only be given to these companies.

"If there is other company willing to sell gas in the areas that have been awarded to these four companies, it has to rent the existing gas pipeline facilities," he said, adding that the exclusive rights is necessary so that a company which has already built gas pipeline facilities have a business certainty.

According to Tubagus, the right to build a gas pipeline and to sell gas in other areas would be tendered through a competitive bidding process.

BPH Migas has also recently licensed 12 local and foreign companies to enter the country's gas retail industry among others including PT Energasindo Heksa Karya, Igas Utama, Mitra Energi Buana, Rabana Gasindo Makmur, Sadikun Niaga Mas Raya, Banten Inti Gasindo, Tata Kasih Internasional, Mitra Media Datanusa and Persada Kriya Dwiguna. (*)