PGN opposes BPH Migas plan to auction pipeline distribution right

State-owned gas distribution company Perusahaan Gas Negara (PGN) has strongly opposed the regulatory body for oil and gas downstream industry BPH Migas' plan to auction gas distribution network right within the PGN's existing networks, saying that the plan would violate the existing law.

"The liberalization in the oil and gas sector as stipulated in the oil and gas law is not aimed at removing the policy that has been long established," the president director of PGN, WMP Simandjuntak said Wednesday.

He was commenting on the plan of BPH Migas to auction gas distribution network right to new investors in strategic business unit (SBU) I areas covering Jakarta, Banten, West Java and Palembang, SBU II areas covering East Java, Semarang and Makassar and SBU III areas covering North Sumatra, Jambi, Pekanbaru and Batam.

Meanwhile, chairman of BPH Migas, Tubagus Haryono said that the agency had not received any formal objection from PGN on its plan to auction new distribution networks right in the three main gas distribution areas.

But he promised that BPH Migas would settle the problem amicably with PGN. Tubagus admitted that the agency planned to auction gas distribution networks right in these areas because PGN's gas distribution networks in the areas had reached full capacity.

"According to regulation, the areas can be opened to new players if the facilities provided by PGN have reached full capacity," he said. (*)