Gas pipeline tenders open in 2 weeks<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
The government will open the tender on a pipeline project
\nconnecting gas-rich Kalimantan and densely-populated Java within
\ntwo weeks, a top official of the Oil and Gas Downstream
\nRegulatory Agency (BPH Migas) says.<\/p>\n
BPH Migas chairman Tubagus Haryono said on Monday the project,
\nspanning 1,200 kilometers from East Kalimantan to Central Java
\nand estimated to be worth US$1.2 billion, would be tendered out
\nin mid-September.<\/p>\n
\"We expect to announce the winner early next year,\" said
\nTubagus.<\/p>\n
The winner of the tender will hold a special right on the
\nroute, meaning that no other companies will be allowed to build
\npipelines connecting the same areas.<\/p>\n
The agency was currently studying the supply and demand
\nbalance for gas between the two islands.<\/p>\n
Based on BPH Migas' rough calculations, some 7.7 trillion
\ncubic feet of gas will be available, taking into account the
\nproven reserves and assuming they get half of the probable
\nreserves.<\/p>\n
\"We estimated that (the pipeline) will reach break-even point
\nin 15 years,\" said Tubagus, without elaborating. \"We're studying
\n(suitable) contract terms,\" he added.<\/p>\n
Indonesia is seeking to speed up the construction of its gas
\ninfrastructure to reduce domestic oil-based fuel consumption. The
\ncountry is facing ballooning subsidies as global oil prices soar,
\nthreatening to widen the state budget deficit to Rp 26.2 trillion
\n($2.53 billion) or 1 percent of gross domestic product (GDP).<\/p>\n
Tubagus further said that the agency would only consider
\ncompanies that participate in the tender as candidates to carry
\nout the project.<\/p>\n
He was commenting on a memorandum of understanding (MOU)
\nsigned between state gas distributor PT Perusahaan Gas Negara
\n(PGN) and the China National Offshore Oil Corporation (CNOOC)
\nlast Wednesday in Beijing on building the gas transmission line.<\/p>\n
\"If (PGN) is not selected as the tender winner, the MOU is
\noff,\" said Tubagus.<\/p>\n
PGN president director WMP Simanjuntak said through a text
\nmessage that under the MOU, the Chinese enterprise would assist
\nPGN in funding the pipeline project.<\/p>\n
The pipeline is part of the so-called Integrated Indonesian
\nGas Pipeline (IIGP) projects, which will distribute gas from
\nproduction points in East Kalimantan, South Sumatra, Riau and
\nEast Java to industrial and household consumers in Java and
\nSumatra.<\/p>\n
The projects, which are estimated to cost some $3 billion with
\na combined transmission length of over 2,000 kilometers, are
\nexpected to be completed by 2009.<\/p>\n
BPH Migas is currently conducting tenders for two segments to
\nconnect Gresik in East Java with Semarang, and Semarang with
\nCirebon, West Java.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/gas-pipeline-tenders-open-in-2-weeks-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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