Malaysia’s Petronas operates the Muriah gasfield and has a 10-year contract to supply 145 billion BTU/d of gas to the state-owned electricity firm PT Perusahaan Listrik Negara (PLN).

The politically-connected Bakrie group, controlled by the family of Indonesia’s chief social welfare minister Aburizal Bakrie, is due to hold a tender to select the contractor to build the pipeline, which is due for completion in 2011.

Siddharta Moersjid, a company spokesman, confirmed that it would build the pipeline from Muriah to the Tambak Lorok power plant in Central Java, but did not elaborate or give financial details. Indonesia has been seeking to divert more gas and coal to power stations in order to meet growing power demands and prevent future blackouts in its over-extended power grid. Industry officials forecast that the country’s power demand will grow around 10% a year.