TEMPO Interactive, Jakarta: The government has given Bakrie Brothers until July 2007 to solve the matters of gas supply and off takers (buyers of gas). Bakrie was the winner of a special rights tender on East Kalimantan-Central Java pipeline.
Head of Upstream Gas and Oil Supervisory Agency (BPH Migas) Tubagus Haryono said that, in line with the contract, Bakrie has a year since it’s being appointed as the tender winner in July last year. “We have required that Bakrie should have carried out development a year after the appointment,” he said during year end press conference on 1 January 2007.
Earlier, Vice President Jusuf Kalla said that the gas pipeline project will be canceled if the gas in the Cepu Bloc started to produce. In addition, in order to meet the gas demand in Java, said Kalla, it is not required that gas of East Kalimantan be taken. According to him, the cancellation of the gas project depends on the decision of President Susilo Bambang Yudhoyono's .
In fact, Head of Upstream Gas and Oil Executing Body Kardaya Warnika said that the plan to channel gas from East Kalimantan to Central Java was not efficient and economical. The reason is that gas supply in East Kalimantan was lower than the demand of it. “If the gas is distributed to Java, it will not be economical. It will not be as much as Java asks,” he said (Tempo, 20 December 2006).
According to Tubagus, Bakrie has not reported the gas supply issue to the government up until today. He added that special rights was not yet granted so that Bakrie's status was limited to the winner of the special rights. BPH Migas is yet to give special rights since Bakrie has not yet owned a permanent business license for channeling natural gas through pipelines. “The permit is issued by Energy and Mineral Resources Minister,” he said. As regards a gas buyer, Bakrie has reported its Memorandum of Understanding with some business agencies. However, the price is yet to set.
Energy Minister Purnomo Yusgiantoro said that the gas pipelining project was not canceled. “What could be canceled is the status of Bakri as the special rights tender that may fail,” he said. If Bakrie cannot convince the government as regards gas supply and the price of gas, he said, the project will not go on.