Gresik-Semarang gas pipeline to be completed next year: Official

Director General of Oil and Gas IGN Wiratmaja Puja said that construction progress of a 267-km Gresik-Semarang gas pipeline has reached 75 percent, and is expected to be on stream in 2017.

?The (gas pipeline) project is targeted to be connected in 2017, and we?re preparing the gas,? Wiratmaja said in a statement obtained Saturday.

He said that the gas was initially expected to come from the Cepu block, but because gas supply from the block has been delayed to 2019, the government is looking for alternative gas source to make sure that the pipeline can be used when it is completed.

The Gresik-Semarang pipeline, owned by PT Pertamina Gas (Pertagas), a gas distribution subsidiary of state-owned oil and gas firm PT Pertamina, is being developed by IDX-listed construction firm PT Wijaya Karya Tbk as the EPC contractor.

The 28-inch pipeline with a capacity of 500 mmscfd will transmit excess gas in East Java to Central Java, supplying gas for industry and power plants along the pipeline. In accordance with the ruling of the downstream oil and gas authority BPH Migas, the pipeline has an open access status. Pertagas will obtain a toll fee to allow the company recovers its investment.

The project was initially targeted to be completed in the first quarter of 2016. Wiratmaja said that one of the toughest challenges in completing the project is in terms of land acquisition because Java is a heavily populated region.

Elsewhere, Wiratmaja said that the tender for the construction of the Semarang-Cirebon gas pipeline has been won by state-owned engineering and construction firm PT Rekayasa Industri (Rekind). He said that Rekind will cooperate with Pertagas as the owner of the project.

?We expect cooperation for the Semarang-Cirebon pipeline project can be established this year, so that construction can start next year,? he said.

Editing by Reiner Simanjuntak