Government Not Yet Cancelled Bakrie Gas Pipe Project
Thursday, 21 December, 2006 | 17:12 WIB

TEMPO Interactive, Jakarta: According to Purnomo Yusgiantoro, the Energy and Mineral Resources Minister, the government has not yet canceled the project for the East Kalimantan-Central Java gas pipe network, to be handled by Bakrie Brothers Tbk.

“But we will be considering this (cancellation),” he said in Jakarta yesterday (20/12).

Purnomo explained that in the piping auction the government had given Bakrie special rights but the company had to search for gas supplies and buyers.

However, “so far the developer (Bakrie) has not yet obtained any gas producers or consumers,” he said, “Even though (the special rights) were given a year ago.”

On the other hand, the government cannot wait long for gas supply certainty from Bakrie.

In addition, the special rights were given only for a certain period of time.

This explanation was in response to Vice President Jusuf Kalla's statement last week that the government would cancel gas piping project between East Kalimantan and Central Java because that it was not economical.

To solve the gas supply problem, said Purnomo, the government has asked Pertamina to speed up gas production by developing Cepu Block, located in Central and East Java provinces.

The potential gas reserves there are around six trillion cubic feet but only two trillion cubic feet of these reserves have been proven.

The remainder must still be proven by further exploration and Pertamina also has gas fields that can be developed.

If the six trillion cubic feet of reserves are proven, then national gas balance assumptions will change.

Purnomo confirmed that Cepu gas will be used fully for domestic demand.

However, Pertamina cannot hurry up gas production in Cepu because an exploration study is still required.

Muhamad Fasabeni