Gas pipeline opening canceled

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)