Pertagas obtains FID approval for Gresik-Semarang pipeline project

Gas distribution firm PT Pertamina Gas (Pertagas) said it would start soon the construction of a 267.22 Km gas transmission pipeline linking Gresik (East Java) and Semarang (Central Java), after the final investment decision (FID) for the project has been approved by parent company, state-owned oil and gas firm PT Pertamina.

Pertagas said in a press statement over the weekend that the company would soon conclude ongoing tender process to select contractor for developing the project. ?Pertagas has obtained approval for the FID of the Gresik-Semarang pipeline (project), and will soon appoint the winning (bidder) to develop the pipeline in accordance with the schedule,? said Pertagas President Director Hendra Jaya in the statement.

The 28-inch gas transmission pipeline project with a capacity of 500 mmscfd will be built within 18 months, and is planned to be on stream in the first quarter of 2016, Pertagas said.

The FID approval was issued following a decision by the Ministry of Energy and Mineral Resources to allocate gas from the Cepu Block for the gas transmission pipeline project, which Pertagas said would provide cheaper gas for industrial consumers along the Gresik-Semarang route, which have been purchasing more expensive CNG.

In accordance with the ruling of the downstream oil and gas authority BPH Migas, the pipeline has an open access status. Pertagas will obtain a toll fee to allow the company recovers its investment.

Editing by Reiner Simanjuntak