Kalimantan-Java gas pipeline project not feasible: Study

The construction of the US$1.2 billion gas pipeline project linking East Kalimantan and Java will be financially unviable given the limited amount of gas reserves, according to a study of the government-sponsored team for the construction of the gas pipeline (PPPTGB).

According to the study of the team which comprises of senior officials from the Ministry of Energy and Mineral Resources, BP Migas, BPH Migas and the office of Coordinating Minister of Economy, the gas pipeline project would be feasible to be constructed only if the larger part of the gas production from East Kalimantan are transmitted through the pipeline.

“It means that the gas export commitments should be cancelled, if the government wants to continue the project,” the team said as reported by Kompas daily on Tuesday.

The government plans to build a 1,277 km-gas pipeline project from Bontang, East Kalimantan to Semarang, Central Java, to meet the growing demand for gas supply in Java. The project which is estimated to cost about US$1.2 billion to build is expected to begin operation in 2009.

According to the team’s study, the proven gas reserves of about 4.3 trillion cubic feet is only enough to meet the gas needs in Java for 10 years. With such short lifespan, the gas pipeline project will be too costly, the team concluded. (*)