Pertamina threatens to issue penalty to PGN

State-owned oil and gas company Pertamina has threatened to issue a penalty to state owned gas distribution company PGN for the delay in the operation of the South Sumatra-West Java gas pipeline, Palembang Pos reported on Monday.

Kun Kurnely, the president director of Pertamina's subsidiary Pertamina EP, said in Muara Enim, Palembang last week that the delay in the operation of the pipeline had caused a loss to Pertamina because it could not distribute its gas to Java according to the schedule.

According to the existing contract, the gas pipeline should have begun its operation on July 1. The contract, however, provides an additional period of three-month.

"If the gas pipeline cannot be operated within the next three months, we have no choice but to give a penalty to PGN," Kun said. (*)