Pertamina annuls contract with IKPT for LNG project<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina has annulled
\na contract to build a giant liquefied natural gas (LNG) plant in
\nIrian Jaya awarded to PT Inti Karya Persada Teknik (IKPT), a
\ncompany controlled by former president Soeharto's golfing partner
\nMohamad \"Bob\" Hasan.<\/p>\n
Pertamina's outgoing president Soegianto said on Wednesday
\nthat the contract, which could have been worth over US$500
\nmillion, was annulled because it had not been awarded through a
\ncompetitive bidding process.<\/p>\n
\"Pertamina is currently drawing up the terms of reference for
\nan open tender for the LNG plant project,\" Soegianto said in
\nresponse to a question raised during a hearing with House of
\nRepresentatives Commission V for mines and energy.<\/p>\n
Legislator Priyo Budi Santoso of the Golkar faction asked how
\nIKPT had managed to obtain the contract with such a long time
\nremaining before the project was due to start.<\/p>\n
The contract to develop the Soeharto Tangguh gas center was
\nawarded to a joint venture involving IKPT, Atlantic Richfield
\nCompany (ARCO) of the United States, and British Gas (BG).<\/p>\n
The plant will be fed with natural gas from three production-
\nsharing blocks in the province -- the Muturi Block operated by
\nBritish Gas, and the Wiriagar and Berau blocks operated by ARCO.<\/p>\n
The Muturi Block is run as a joint venture between British Gas
\nand Cairns Ltd, a subsidiary of Malaysia's Genting Bhd.<\/p>\n
ARCO operates the Berau block in partnership with Nippon Oil
\nand Kanematsu from Japan, and the Wiriagar block in partnership
\nwith Kanematsu.<\/p>\n
ARCO and British Gas have also certified gas reserves of 14.4
\ntrillion cubic feet (tcf) in the Tangguh area of the remote
\nprovince. The area also has another 3.9 tcf of probable gas
\nreserves and 3 tcf of possible gas reserves.<\/p>\n
However, buyers have yet to be found for the reserves in
\nTangguh.<\/p>\n
Minister of Mines and Energy Kuntoro Mangkusubroto said the
\ngovernment would allow IKPT to participate in a future tender for
\nthe project.<\/p>\n
\"The project should be awarded through an open tender. If IKPT
\nthen wins the project, that is their good luck,\" Kuntoro said at
\nthe same hearing.<\/p>\n
No information was available regarding the value of the
\ncontract, but analysts estimate it could exceed $500 million.<\/p>\n
IKPT was previously appointed by Pertamina to build three LNG
\ntrains to operate in Bontang district, East Kalimantan. Contracts
\nfor the construction of the three trains were worth $522 million,
\n$511 million and $708 million respectively.<\/p>\n
Gas pipeline<\/p>\n
At the hearing, Kuntoro also said that he had instructed
\nPertamina to be fair in awarding the contract for construction of
\na 650-kilometer underwater natural gas pipeline connecting gas
\nfields in West Natuna in the South China Sea to Singapore, as
\nstated in Presidential Decree No.16\/1994.<\/p>\n
Asian contractors have complained that the terms of the
\ncurrent tender, which was drafted by Pertamina's West Natuna gas
\nfield contractors -- Britain's Premier Oil, Canada's Gulf
\nResources, and Conoco from the United States -- give an unfair
\nadvantage to European and American companies.<\/p>\n
Among their objections to the proposed tender is a clause
\nwhich prevents companies without previous experience of managing
\nsimilar projects from winning the contract. No Asian companies
\nmeet this requirement.<\/p>\n
\"The project will go out to tender in January. We have
\ninstructed Pertamina not to include any unrealistic terms,\"
\nDirector General of Oil and Gas at the Ministry of Mines and
\nEnergy Soepraptono Soeleiman explained.<\/p>\n
Kuntoro also denied rumors that Indonesia intends to leave the
\nOrganization of Petroleum Exporting Countries (OPEC) in protest
\nat the organization's inability to reverse the downward trend in
\nworld oil prices.<\/p>\n
\"We don't have any intention of leaving OPEC,\" Kuntoro said.
\n(jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-annuls-contract-with-ikpt-for-lng-project-1447893297",
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