Construction of East Kalimantan-East Java gas pipeline delayed: Official
Monday, July 4 2005 - 03:14 AM WIB
"The (construction) of the giant gas pipeline project will be resumed after the signing of the Cepu block has been completed and pending a review (of the pipeline project) by the government," Minister of Energy and Mineral Resources Purnomo Yusgiantoro was quoted by Investor Daily as saying in its Monday edition.
President of state gas distribution company PGN, WMP Simanjuntak comfirmed the delay in the construction of the 1,200 km gas pipeline. PGN owns the pipeline project.
"We'll continue (the project) once the Cepu deal has been completed, so that we can decide how much gas (can be supplied by the Cepu block project)," Simanjuntak said.
He said that the review of the gas pipeline project was among others aimed to look into the capacity of the Cepu block to supply gas to the East Java region. He added that the study was important because the project would require a huge amount of funds totaling US$1.2 billion.
PGN has planned to develop the gas pipeline to distribute gas from East Kalimantan producers to industrial and household consumers in the heavily populated region of East Java.
The government and U.S. oil company Exxon Mobil Corp have been in intensive talks to finalize a deal on the development of the Cepu oil block. Both sides have agreed on key issues such as the production split and participating interests in Cepu.
Exxon said its Indonesian subsidiaries have signed a memorandum of understanding with Indonesian state owned oil firm Pertamina and the Indonesian government.
The government expects a final deal can be signed in September, according to Pertamina chief commissioner Martiono.(*)