South Sumatra governor defends pipeline project
South Sumatra governor defends pipeline project
JAKARTA (JP): The South Sumatra provincial administration has
come out in support of continuing the operation of a disputed gas
pipeline project even though President B.J. Habibie backed out of
its dedication last week.
South Sumatra governor Rosihan Arsyad said in the provincial
capital of Palembang on Saturday that the operation of the
pipelines would contribute significant revenue to the province.
He expected state gas distribution company PT PGN and Canada's
Gulf Resources to continue operating their gas pipelines because
of their potential.
"Operation of the gas pipeline will bring revenue of about
US$750,000 per day (to the companies), some of which will be used
for the development of the province," Rosihan was quoted by
Antara as saying.
PGN has built a 534-kilometer pipeline to transport natural
gas from Gulf's gas fields in Grissik, Musi Banyuasin, South
Sumatra, to the Duri oil field in Riau owned by PT Caltex Pacific
Indonesia.
The gas is used by Caltex to replace crude oil pumped out of
the Duri oil fields. Gulf receives 50,000 barrels per day (bpd)
of crude oil from Caltex in return.
PGN started operating the pipeline in Oct. 1 and Habibie was
scheduled to dedicate the operation on Thursday.
Habibie refused to dedicate the pipeline, reportedly out of
concern over a land dispute involving Gulf and the oil palm and
coconut plantation PT Sentosa Mulya Bahagia.
Sentosa Mulya accuses Gulf of appropriating plots without
providing compensation in its plantation area to develop its gas
terminal and gas pipelines linking the gas terminal to its gas
fields in Grissik.
The Musibanyuasin district court has issued a provisional
judgment ordering Gulf to halt operations pending the court's
final decision on the case.
Rosihan said Gulf should be allowed to continue operations
until the court made a final decision because its operation did
affect Sentosa Mulya's plantation activities.
"Furthermore, the high court may overrule the decision of the
district courthouse," Rosihan said.
He said the provincial administration had sent a letter to the
central administration to explain that Gulf's operations did not
pose a security and safety disruption at the plantation. (jsk)