Three firms competing for Kalimantan-Java gas pipeline project

Oil and gas downstream regulator BPH Migas announced on Wednesday three companies had submitted bids for the contract to build a giant natural gas pipeline stretching from East Kalimantan to Central Java.

BPH Migas has given interested companies until May 31 to submit their bids for the contract to build the pipeline.

Three companies that submitted their bids by the deadline are state owned gas transmission and distribution company PT Perusahaan Gas Negara (PGN), Bakrie & Brothers and Barata Indonesia, according to BPH Migas? chairman Tubagus Haryono.

BPH Migas initially set the deadline until April 28 for bidders to submit their bids. Five companies then submitted their bids by the deadline, that is PGN, Bakrie, Barata and Bumi Karsa Lini Nusa and Alpha Kharisma Persada.

However, BPH Migas decided to extend the deadline and returned the bidding documents to all the five companies following protests from PGN over BPH Migas? move to leak the results of the survey on the project conducted by the state firm using funds from the United States government.

Tubagus said BPH Migas would select the winner within one month.

?The selection will be carried out based on technical and financial aspects. With regards financial aspects, we shall see the IRR (investment rate of return), payback period proposed by the bidders. They should also talk with gas producers about supplies (to the pipeline),? Tubagus said.

The 1,219-kilometer pipeline is designed to transmit natural gas from East Kalimantan to Semarang in Central Java to meet growing demands in Java.

The project which is estimated to cost about US$1.2 billion to build is expected to begin operation in 2009. (Godang)