Downstream regulatory authority BP Migas is preparing the tender for the 1200-kilometre pipeline on which the government has put a $1.2 billion price tag.

However, industry sources said the cost would likely be between $1.7 billion and $1.9 billion.

The intention is to pipe between 700 million and 1 billion cubic feet per day of gas from fields off East Kalimantan, operated by companies including Chevron, Total and Vico, to the densely populated, energy-hungry island of Java to reduce Indonesia's dependence on costly diesel imports.

However,