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)