Govt to conduct comprehensive feasible study on E. Kalimantan ?Central Java gas pipeline project

The government will conduct a comprehensive study about the feasibility of the plan to construct a gas pipeline from East Kalimantan to Central Java.

The study will be made to check whether this high-cost project will fulfill the economic criteria or not?

This was revealed by the Minister of Energy and Mineral Resources Purnomo Yusgiantoro in Jakarta on Monday.

Purnomo said the East Kalimantan-Central Java gas transmission project was not included in those projects which will be realized within two or three years.

?The Cirebon-Semarang and Semarang-Gresik gas pipeline projects are the ones to be completed soon. If the LNG terminal in Cilegon is completed, a gas pipeline will be built soon from the LNG terminal to Muara Tawar gas-fired power plant so that the conversion from diesel to gas can be done,? Purnomo said.

The problem is, there are requests to speed up the construction of East Kalimantan-Central Java gas pipeline. As per the rules, this project can be undertaken only through tender, which will be the sole authority of the downstream oil and gas authority BPH Migas.

So far, state gas utility PT Perusahaan Gas Negara (PGN) has said it has conducted a feasibility study on the 1,227 km gas pipeline project from Bontang to Semarang. PGN has also requested the government to give it the special right to build the pipeline without tender.

But Purnomo said he has not yet received the feasibility study report. Given that thera are several opinions against the project, BPH Migas must give explanation about the feasibility of the project

?This project is a huge project worth of US$1.2 billion. Therefore, we have to calculate the gas reserves in East Kalimantan and we must also fulfill our contract obligations with our traditional buyers,? Purnomo said.

Today, gas in East Kalimantan is mostly converted into LNG at the Bontang LNG plant for export markets. (godang)