PGN solicits bids for Riau-North Sumatra gas line

Eric Watkins
Senior Correspondent

LOS ANGELES, Dec. 29 -- Indonesia's state-owned gas distributor PT Perusahaan Gas Negara (PGN) plans to invite bids for construction of a $600 million, 360-km gas pipeline to link Riau and North Sumatra.

The pipeline, which will carry 200-300 MMscf of gas from Duri, in Riau, to Medan, in North Sumatra, is expected to come on stream by yearend 2007.

PGN Pres. Sutikno said the projected pipeline would connect with two other lines currently under construction.

One will extend between Grissik in South Sumatra and Rawa Maju in West Java, while the other will join Pagardewa in South Sumatra and Cilegon in Banten. The two lines, spanning 1,106 km, will be able to transport 950 MMscfd of gas.

Indonesia has come under pressure to accelerate development of the country's gas infrastructure.

In October, the Indonesian Chamber of Commerce and Industry (Kadin) asked the government to draw up a policy to accelerate development to ensure domestic gas supply to meet rising demand.

"Gas distribution infrastructure which has already been planned should be built soon," said Gito Ganindito, Kadin deputy chairman for mining affairs, responding to reports on the sluggish construction of Indonesia's gas infrastructure and its shortages of gas for the domestic market.

Contact Eric Watkins at hippalus@yahoo.com.

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