Govt seeks legal opinion from AGO over Kepodang case
Monday, January 30 2012 - 08:27 AM WIB
Ministry of Energy and Mineral Resources (ESDM) has asked legal opinion of Attorney General Office (AGO) over the possible status change of gas pipeline connecting the Petronas-operated Kepodang oil and gas field in Muriah block, East Java to Tambak Lorok power plant in Central Java owned by state electricity company PT PLN.
The ministry is considering to change the status of the gas pipeline to be under downstream mechanism from an upstream project, which is part of the Kepodang gas development.
?We have asked ?fatwa? (legal opinion) from Attorney General whether the Kepodang case breaches the law or not,? ESDM Deputy Minister Widjajono Partowidagdo told Petromindo.com.
He said he has met with the Attorney General on general crimes (Jampidum) to talk about the matter. The recommendation from the AGO will be used for continuation of the Kepodang gas project development and the gas pipeline.
In 2008, PLN made an agreement with Petronas that it would receive 354 billion cubic feet (bcf) of gas until 2021 from 4th quarter 2011. According to the initial plan, the pipeline would be built by Petronas as part of its contract in the operation of the Kepodang gas field.
In 2009, Bakrie & Brothers, holder of the Kalimantan Java gas pipeline project, proposed to build the pipeline network from the Kepodang field to the Tambak Lorok Power Plant as part of the company?s Kalimantan-Java (Kalija) pipeline project. The move was certainly resisted by Petronas as it was against its PSC contract of developing the Kepodang gas field.
After a series of negotiations held in late 2010, the government approved Bakrie & Brothers? proposal and an early estimate suggested that the company would start the gas delivery in the fourth quarter of 2014. The change of scenario had sparked some friction between the government and Petronas, causing the delay in the development of the Kepodang gas field.
Currently, Petronas has the right to operate the field until 2021.
Should the gas pipeline become part of the Kalija pipe network, the supervision on the construction of the pipeline will be in the hands of downstream oil and gas regulator BPHMIGAS.
Editing by Roffie Kurniawan