Petronas interested in Java pipelines

Malaysia?s oil and gas company Petroliam Nasional Bhd (Petronas) was interested to develop a gas pipeline network on Java island, a government official said on Thursday.

?Two weeks ago, Petronas came to me, expressing its plan to develop a gas pipeline in Java island,? Tubagus Haryono, head of oil and gas downstream authority BPH Migas, told reporters on the sidelines of a gas seminar in Jakarta.

He did not give details.

A total of 12 local companies have reportedly voiced interest in gas pipeline development in Java but Tubagus said only three of the 12 had submitted their plans to BPH Migas.

The three companies are: PT I-Gas which plans to develop a gas pipeline in West Java?s Cikarang regency; PT Banten Intigasindo, which plans to develop a gas pipeline in Banten?s Cilegon regency; and PT Energi Timur Jauh, which plans to develop a gas pipeline in East Java province.

Tubagus said that once the companies got licenses to develop gas pipeline, they would also get ?natural monopoly? rights in their operation areas. Being a natural monopoly means that all pipeline expansion requires permission from the holder of the natural monopoly in the area.

Tubagus earlier said that investors will get one contract area each and no investor is allowed to operate in the operation area of another investor. BPH Migas holds the authority to decide the location of the pipeline and gas price. This aims to control unwarranted gas prices to be imposed on consumers.(Godang)