The Indonesian government rejected the proposal of conglomeration firm, PT Bakrie & Brothers Tbk (IDX: BNBR) to build the Cirebon - Semarang gas pipeline project in Central Java - Photo by EMR Ministry Office

JAKARTA (TheInsiderStories) – The Indonesian government rejected the proposal of conglomeration firm, PT Bakrie & Brothers Tbk (IDX: BNBR) to build the Cirebon – Semarang gas pipeline project in Central Java. The state decided to funds the project through the state budget scheme.

The decision contained in the letter of the energy and mineral resources (EMR) ministry sent on April 1 to the head of the Downstream Oil and Gas Regulatory Agency (BPHMigas). This project was originally to be worked on by state-owned firm, PT Rekayasa Industri (Rekind), but eventually withdrew from the project. Then the plan will be worked on by the Bakrie Group as the second winner.

The pipeline project has been stalled for 15 years since 2006 as part of the National Strategic Project. Early of 2021, Bakrie & Brothers has sent their proposals to BPHMigas to undertakes the Cirebon – Semarang transmission pipelines project after Rekayasa Industri hand over their rights to the government.

Currently, the conglomeration firm is in the process of building the second phase of the Kalimantan – Jawa (Kalija) gas transmission pipeline. According to the director, Amri Aswono Putro, the construction of this project is still not certain caused the shortage of gas supply and demand.

In February 2020, Rekind, has conducted a groundbreaking of the project, which is located near to Semarang – Batang Toll Road. Asa assured if the project run, the government will stop gas supply to Singapore starting in 2023 to meet the domestic supplies. The 255 kilometers-long pipe is estimating need costs Rp2.3 trillion (US$164.28 million).

The gas pipelines will connecting pipes from Banten to East Java with a length 1,538 kilometers. The existence of this pipeline is also to support the integration of the Trans Sumatra and Trans Java pipelines with total length of 3,574 kilometers.

On March 21, 2006, BPH Migas has auctioned off transmission segments and declared Rekind as the winner with design capacity around 500 million standard cubic per day.

EMR minister, Arifin Tasrif, has projected that oil and gas lifting production ready to sell in 2024 could reach 2.06 million barrels of oil equivalent per day (BOEPD). The projection comes from the development of existing oil and gas wells.

For 2023, its expected that there will be additional oil lifting from the Ande-ande Lumut field in Northwest Natuna Island by 25,000 barrels per day (bpd) and the Indonesia Deepwater Development project in Makassar, South Sulawesi of 23,000 bpd in 2024.

Written by Editorial Staff, Email: theinsiderstories@gmail.com