East Java gas contracts to be revised due to mudflow

Oil and gas regulating body BPMIGAS is considering several options for amendment of gas sales and purchase contracts in East Java to maintain gas supplies in the province despite troubles caused mudflow from the well owned PT Lapindo Brantas Inc.

BPMIGAS' head of marketing division Djoko Harsono said on Monday that most of gas in the province was transmitted through the pipeline owned by state owned oil and gas company PT Pertamina. The rest is delivered through the pipeline owned by state owned gas company PT Perusahaan Gas Negara (PGN)

However, Pertamina has suspended the operation of its pipeline due to the mudflow from Lapindo's Banjar Panji exploration well, leaving PGN the only one to deliver gas in the province at present.

As a result of the problem, some gas producers in the province could not deliver gas to their contract buyers.

Options to solve the problem include that gas supplies from producers in the northern part of the province, that is Kodeco Energy and Hess Corp., will be delivered to consumers in Gresik area, that is state owned fertilizer firm PT Pupuk Kimia Gresik (PT PKG), PT PGN, gas turbine power plant (PTLG) Gresik owned by state electricity firm PT PLN, Djoko was quoted by Investor Daily as saying.

Meanwhile, supply of gas from southern area, coming from EMP Kangean, Santos Pty and Lapindo Brantas, will be delievered to users in Waru and surrounding areas, such as PT PGN and combined cycle power plant (PLTGU) Grati owned by PT PLN.(*)