Land compensation problem hampers gas project in Riau

The development of gas field in Tenayan Raya near Pekanbaru, the provincial capital of Riau has been delayed for almost one year due to a problem related to the acquisition of land to be used for the construction of a pipeline which will link the gas project with PLN's power plant in the province, Kompas reported on Thursday.

Djoko Sudiro, a senior official of the local office of BP Migas, the regulatory body for oil and gas upstream operations, said in Pekanbaru on Wednesday that the development of the gas field could not be realized as scheduled due to a problem related to the acquisition of the land for the pipeline network.

"The land acquisition which began in July last year could not be completed as scheduled because the compensation requested by the land owners was far higher than the market prices, " he said.

The gas field was initially scheduled to begin early last year with a production capacity of about 30 million cubic feet per day. The gas will be used to supply PLN's power plant in Pekanbaru. (*)