PGN refuses to submit pipeline bid until BPH Migas clears FS leakage charge

State gas distribution firm PGN is refusing to submit bid document for the development of Kalimantan to Java gas pipeline project until downstream oil and gas authority BPH

Migas settles PGN?s objection over the leak of the project?s feasibility study owned by PGN to four other contenders, president WMP Simandjuntak was quoted by Bisnis Indonesia as saying Monday.

?PGN has submitted objection to BPH Migas over the FS leak, but thus far, BPH Migas has done nothing to settle the matter, ? he said.

BPH Migas? deadline to submit bid for the project is April 28, 2006 with winner scheduled to be announced the following month.

Bisnis reported that Nafrizal Sikumbang, BPH Migas Natural Gas Director was distributing the FS document, which belonged to PGN to other four bidders, namely PT. Bakrie&Brothers, PT.Alfa Karsa Persada, PT. Barata Indonesia and PT. Bumi Kharisma Lininusa.

PGN, with US$600,000 grants from USTDA had commissioned the FS, which was completed in 2002.

Simandjuntak declined to say whether PGN would sue BPH Migas for the leakage.

The FS showed that the 1,200-km controversial pipeline project could be built with US$1.2 billion investment. The pipeline would be able to transmit 1.1BCFD of gas from gas rich province of East Kalimantan to Java. However, many industry players deemed the project as unfeasible, saying that building LNG terminal in Java could be much cheaper and reliable. (*)