House demands second look at LNG contract<\/p>\n
JAKARTA (JP): Several legislators have called on state oil and
\ngas company Pertamina to investigate alleged irregularities in
\nthe awarding of the contract for the construction of a liquefied
\nnatural gas (LNG) train in East Kalimantan to a company owned by
\ntycoon Mohamad "Bob" Hasan.<\/p>\n
The members of the House of Representatives' Commission VIII
\nfor mines and energy said they suspected PT Inti Karya Persada
\nTeknik (IKPT) obtained the contract thanks to the connection of
\nthe owner with then president Soeharto.<\/p>\n
"Aside from the fact that the contract was awarded without
\ncompetitive bidding, there is a suspicion that the cost of the
\nproject was marked up significantly," commission head Irwan
\nPrayitno was quoted by Antara as saying on the sidelines of the
\nhearing between the commission and Pertamina on Tuesday.<\/p>\n
The LNG project in question is the eighth train, or Train H,
\nat the LNG complex in Bontang, East Kalimantan, owned by PT Badak
\nNGL Co.<\/p>\n
Pertamina inaugurated the new LNG train on Monday.<\/p>\n
Aside from Train H, IKPT has also built Train F and G at the
\ncountry's largest LNG complex. The train has the production
\ncapacity of 2.9 million tons of LNG per year.<\/p>\n
Irwan accused IKPT of marking up the cost of the project by
\nUS$300 million to $794.4 million.<\/p>\n
In comparison, he said, Malaysia spent $902.2 million to build
\nthree trains in Bintulu which have a total production capacity of
\nnine million tons per year.<\/p>\n
Pertamina's president Martiono Hadianto said he did not have
\nany misgivings about plans to investigate the alleged corruption.<\/p>\n
He noted that Pertamina's foreign oil and gas contractors,
\nwhich co-own the LNG plant and were highly sensitive to corrupt
\npractices, thus far made no complaints about the selection of
\nIKPT.<\/p>\n
Meanwhile, Pertamina's processing director Samto Utomo denied
\nany mark-up practices in the project.<\/p>\n
In a written statement distributed during the hearing,
\nPertamina projected net profit at Rp 2.2 trillion ($305 million)
\nfor the first half of the fiscal year 1999\/2000.<\/p>\n
It projected oil output at 14.7 million barrels, gas output at
\n112.9 million cubic feet and fuel output at 125.8 million barrels
\nduring the period.<\/p>\n
It expected to export 33.49 million barrels of oil and 13,906
\ntons of LNG in the period.<\/p>\n
The government's subsidy for fuel is estimated at Rp 14.1
\ntrillion in the period. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/house-demands-second-look-at-lng-contract-1447893297",
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