Kalija Phase II project likely to be cancelled
Friday, June 13 2014 - 07:05 AM WIB
Downstream authority BPH Migas confirms that the Kalija Phase II gas pipeline project which is designed to deliver gas from East Kalimantan to Central Java is likely to be cancelled due to the non-availability of gas.
"There is a possibility that the Kalija Phase II project would be canceled due uncertainties over gas allocation for the pipeline," BPH Migas Chairman Andy Noorsaman told Petromindo.com.
East Kalimantan has in fact a lot of gas but the province also needs the gas for itself, he said.
Last week it was reported that the Ministry of Energy and Mineral Resources is discussing the possibility of canceling the Kalija Phase II project if there is no certainty of allocation of gas for 25 years.
The project is owned by PT Kalimantan Jawa Gas (KJG), a newly-established joint venture between state owned gas distributor PT Perusahaan Gas Negara with 80 percent PT Bakrie & Brothers, the holding company of the Bakrie Group with 20 percent shares.
The Kalija gas pipeline project consists of two: Phase I and Phase II. The Phase I project, which was launched in March this year, has a length of 207 m and will function to deliver gas from the Kepodang field offshore Central Java to the Tambak Lorok power plant in Semarang, the capital of Central Java. The Phase II project aims to build a 1,200 km pipeline from East Kalimantan to Central Java which will be connected with the Phase I pipeline.
East Kalimantan administration protests the Phase II project, saying the province needs the gas and would not export to Central Java while it is still in need of the gas.
Editing by Johannes Simbolon