Local private companies plan to build gas pipelines

Around seven local companies have the formal government permits to build gas pipelines, but they are still waiting for government regulation on downstream activities to begin the construction work, Investor Indonesia newspaper reported in its Wednesday edition.

Oil and gas sector’s regulating body on downstream activities (BPH Migas) chief Tubagus Haryono said the above companies have already applied for government’s permission to distribute gas to consumers through pipeline.

“In fact, there are six to seven companies have received permission from the ministry of energy and mineral resources in principle. Later, the regulatory body on downstream activities (BPH Migas) will give their rights (to distribute gas),” Tubagus said in Jakarta on Tuesday.

He explained that the above companies will build their own gas pipelines in particular routes, provided there are no other companies operating in those areas. It will be the authority of BPH Migas to decide the location of the pipeline and gas price. This is required to control unwarranted gas prices to be imposed on consumers. In the meantime, the companies want to build pipelines on Java Island, especially in the industrial area of West Java.

As far as the names of the companies are concerned, Tubagus just confirmed that they are all domestic companies.

The government regulation on downstream activities was supposed to be issued in January 2004. (*)