Gas pipeline opening canceled

JAKARTA (JP): President B.J. Habibie canceled on Thursday the planned dedication of a gas pipeline in central Sumatra owned by state gas distribution company PT Perusahaan Gas Negara (PGN) following a land dispute involving one of the company's clients.

The president was scheduled to dedicate the operation of the 536-kilometer gas pipeline Thursday morning from the Bina Graha presidential office.

No official explanation for the cancellation was available at the palace.

PGN started operating the pipeline in Oct. 1 to transport natural gas from the Grisik gas fields in South Sumatra, owned by Canada's Gulf Resources, to the Duri oil field in Riau, owned by PT Caltex Pacific Indonesia.

Gulf was recently accused by PT Sentosa Mulia Bahagia of using 57 hectares of its land in South Sumatra for the development of its gas pipelines without providing compensation, which it said amounted to at least Rp 16 billion (US$2 million). (jsk/prb)