Kalimantan-Java gas pipeline tender awaits Minister's decision

Although the tender for the development of the East Kalimantan-Central Java gas pipeline project has been officially announced, the government has not yet issued its decision whether or not the project will continue, Bisnis Indonesia reported on Tuesday.

Tubagus Haryono, the head of the regulatory body for oil and gas downstream operations BPH Migas, said that his office was still waiting for the decision of the Chief Economic Minister Budiono whether or not the agency would go ahead with the tender process.

"The minister's decision is quite important to ensure certainty of the project," he added, saying that the opposition of the local residents and non-governmental organization against the US$1.2 billion pipeline project could not be ignored.

Five companies including state owned gas utility PGN, Bakrie Brothers, Barata Indonesia, Bumi Karsa Lini Nusa and Alfa Kharisma have expressed their interest to join the tender for the license to build and operarte the 1,219 kilometer undersea gas pipeline linking gas rich East Kalimantan and Central Java.

The government plans to build a 1,219 km-gas pipeline project from Bontang, East Kalimantan to Semarang 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.(*)