Govt may cancel Bontang-Java gas pipeline project

Vice President Jusuf Kalla said Wednesday the government might cancel the planned construction of a gas pipeline connecting a gas field in Bontang, East Kalimantan, to Semarang, Central Java, Antara reported.

Kalla, however, stressed the possible cancellation was not in response to protests against the project, but rather the result of a new study of the gas market in Java that showed the project might not be necessary.

"Recalculations of our national gas needs shows that the pipeline project is not needed .... It (the cancellation) is not in response to demonstrations," Kalla said.

Earlier, Bontang Mayor Andi Sofyan Hasdam said residents opposed the pipeline project because many people in the municipality would lose their jobs if gas was directly transported to Java via the pipeline.

According to Kalla, projected gas production at the Cepu field in Java could cover the gas needs in Java.

Initially, the government planned to construct the 1,000 kilometer pipeline at a cost of some US$1,800 billion. (*)