Pertamina may delay construction of Semarang-Gresik pipeline

State owned oil and gas company Pertamina may delay the construction of the 390 kilometer-gas pipeline linking Semarang, Central Java to Gresik in East Java due to the lack of gas supply and potential buyers.

Pertamina's president director Ari Soemarno told reporters in Jakarta on Friday that the construction of the Gresik-Semarang gas pipeline could not be begun this year as scheduled because Pertamina had not yet secured sufficient gas supply for the gas pipeline.

Ari said that Pertamina had asked the government to extend the special rights to build the pipeline for another one year.

At this moment Pertamina expected the gas supply would come from the Cepu block and from South Sumatra-West Java Pipeline, Ari added.

Pertamina was awarded the special rights to build and operate the gas pipeline in March last year, outbidding several other local companies. The construction of the pipeline will cost about US$179 million.

Pertamina will be given 25-years right to operate the pipeline segments. The pipeline is part of national pipeline grid that was planned to connect the islands of Sumatra, Java and Kalimantan. The pipeline will be designed to flow 350-500MMCFD of gas. (Godang)