Govt appoints Petronas to build C. Java pipeline instead of Bakrie
Wednesday, June 9 2010 - 07:19 AM WIB
Upstream oil, gas regulator BPMIGAS vice chairman Hardiono told reporters on Wednesday that Minister of Energy and Mineral Resources Darwin Zahedy Saleh had issued the decree on the appointment of Petronas Carigali to handle the pipeline project on March 18, 2010.
?It's not part of the East Kalimantan-to-Java gas pipeline project. Based on BPMIGAS study, there is no source of gas for the project (East Kalimantan to Java)? he said.
Petronas is expected to supply PLN with 200 MMCFD of gas from its Kepodang field under the 10-year contract, starting 2012.
In March last year, downstream oil, gas regulator BPH Migas's chairman Tubagus said the 200-km transmission pipeline to transport gas from Muriah block would be built by Indonesia-listed firm PT. Bakrie & Brothers, which is controlled by the politically influential Bakrie family. The firm will invest US$150-170 million to develop the pipeline, which is expected to be completed in 2011, according to Tubagus.
Tubagus said on March 23, last year that the Muriah-Tambak Lorok segment is part of the right given to Bakrie & Brothers to build a 1,200-km pipeline from East Kalimantan to Java. Bakrie won the right to develop the pipeline in 2006 after submitting the lowest toll fee of US$0,84 per MMBTU.
However, Jugi Prajogio, a senior official at BPH Migas, said on Wednesday that Bakrie had recently submitted a letter to the Ministry of Energy and Mineral Resources, stating its willingness to lower the toll fee for the Kalimantan-Java pipeline.
"As long as I remember, the initial toll fee is $0.5 per MMBTU. The toll fee proposed by Bakrie must be lower than that. As far as I know, the ministry is considering the Bakrie proposal," he said. (Bernard)