PGN allocates Rp40 billion for E. Java gas pipeline

State gas transmission and distribution firm PT Perusahaan Gas Negara (PGN) has allocated Rp40 billion (US$= Rp 8,883) for building 107-kilometer gas pipeline in East Java, Bisnis Indonesia daily reported Saturday.

The fund will come from the state budget, the paper quoted as saying Trijono, general manager of the East Java office of PGN.

The pipeline was to transmit gas to households in Surabaya and its surrounds, Trijono said.

To be transmitted through the pipeline would be gas supplied by oil, gas producer PT Lapindo Brantas.

Lapindo had pledged to increase its gas supply to East Java to 50 million cubic feet per day (MMCFD) early next year, from the current 35 MMCFD, Trijono said on Friday.

Trijono said PGN currently supplied 78 MMCFD of natural gas to 3,945 households in East Java, in addition to 146 industries and 63 commercial enterprises in the area. Gas for those consumers comes from Lapindo and BP Indonesia, he said.

East Java has faced acute gas shortage over the past months due to a drop in gas supply from BP?s Kangean Block offshore East Java. (*)