Govt promises to build gas infrastructures, refinery in East Kalimantan

The government promised to develop gas infrastructures and build a 300,000 bpd refinery in East Kalimantan in line with the provincial government?s demands.

The two projects are among the list of demands made by the provincial administration and legislature in response to the government?s plan to award a majority interest in the Mahakam bock to state owned oil and gas firm PT Pertamina in the post-existing contract period.

The East Kalimantan government and legislature insisted that the province must have at least 19 participating interest (PI) in the block. The province?s governor, Awang Faroek, even told reporters the province wants to have up to 50 percent of the block. They also demanded that gas infrastructures should be built across the province so that gas can be distributed to all households there, a 300,000 bpd refinery should be built in Bontang, and oil fuel depots should be built to ensure the province will never experience shortages of fuel supply.

Director General of Oil and Gas IGN Wiratmaja said in a statement on Friday the government will soon make a roadmap for the development of gas infrastructures in the province, including gas transmission pipelines and distribution pipelines to houses. The projects will be offered to the private sector. If they consider the project is not profitable, the government will help finance the projects using the state budget.

?We shall discuss the matters with the House of Representatives? Commission VII and Budget Commission,? he said.

With regards the Bontang refinery, he said the government will soon a presidential regulation to assign Pertamina to do the project. Besides, Pertamina will be assigned to identify locations in the province where it will oil fuel depots to ensure oil supply distribution in the province.

Editing by Johannes Simbolon