PGN's estimated gas sales to be 18.3 percent lower this year

The Jakarta Post ,  Jakarta   |  Sat, 07/07/2007 10:59 AM  |  Business

Ika Krismantari, The Jakarta Post, Jakarta

State gas distributor PT PGN said Friday that its gas sales might be 18.3 percent less than its estimate for this year due to delays in its South Sumatra-West Java (SSWJ) pipeline project.

President director Sutikno said that gas sales might only reach an average of 453 million cubic feet per day compared with its previous estimate of 555 million cubic feet per day.

""We have faced opposition from landowners who don't want the pipeline on their land, even though we've already paid them compensation.

""Not to mention the weather problem, which has slowed down the project after torrential rain caused flooding along the Musi river in South Sumatra,"" Sutikno said.

The US$1.3-billion pipeline project comprises two pipeline tracks spanning a total of 1,106 kilometers from South Sumatra to West Java.

The first line will connect Pertamina's gas field in Pagardewa, South Sumatra, to the industrial area of Cilegon, West Java, while the second one will connect a gas field operated by ConocoPhillips in South Sumatra's Grissik field to Muara Bekasi in West Java.

The completion of the first pipeline, which has been in operation since March, was six months late. The second one, currently under construction, is estimated to be completed by October next year, or some seven months behind schedule.

Based on its contract, PGN will deliver up to 250 million cubic feet of gas per day from Pagardewa and 400 million cubic feet per day from Grissik when the pipelines are operating at full capacity.

Sutikno also said the delay would result in a drop in next year's estimated gas sales of 22 percent to 716 million cubic feet a day from the company's earlier forecast of 919 million cubic feet a day.

PGN corporate secretary Widyatmoko Bapang said that even though the figures had been revised down, they were still better than the company's gas sales figure of 323 million cubic feet per day in 2006.

Meanwhile, the company is in talks with the government about establishing a gas-pricing mechanism after PGN's proposal to raise the gas price by 10 percent in August was turned down by the government.

The Energy and Mineral Resources Ministry's director general of oil and gas, Luluk Sumarso, said the government would try to design a mechanism that would not only protect the consumer's interests, but also the industry's.

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