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Jakarta. Bakrie & Brothers is in the pipeline. Again.

Tubagus Haryono, head of downstream oil and gas regulator BPH Migas, on Friday said the government had awarded investment firm Bakrie & Brothers a contract to build a 200-kilometer natural gas pipeline in Central Java.

The pipeline will run from the Kepodang gas block to Semarang.

Tubagus said the decision was made by BPH Migas, upstream oil and gas regulator BPMigas, and Evita Legowo, director general of oil and gas at the Energy Ministry.

“We discussed it and we agreed that Bakrie would build the pipeline,” he said. The same decision was made in March last year, when Bakrie & Brothers was chosen to replace Petronas Carigali on the project.

However, BPMigas wanted to use the upstream development scheme to build the pipeline, and in March this year Energy and Mineral Resources Minister Darwin Zahedy Saleh decided that Petronas would build the pipeline instead.

Later, Bakrie & Brothers offered to lower the fee it would charge pipeline users, and the bid was reconsidered.

Tubagas said Bakrie & Brothers was also chosen because it agreed to develop the pipeline under the downstream development scheme, while Petronas insisted on the upstream scheme.

Indonesia’s cost recovery scheme allows oil and gas contractors to claim reimbursement for upstream production costs from the government. Downstream operators cannot claim cost recovery.

Bakrie & Brothers managing director Bobby Gafur Umar told the Jakarta Globe on Friday that developing the project under the downstream scheme would allow all natural gas companies operating in the region access to the pipeline.

Construction costs are estimated at $140 million.