PGN needs $2.95 billion to develop gas pipeline<\/p>\n
Moch N. Kurniawan, The Jakarta Post, Jakarta<\/p>\n
State-owned gas company PGN will need about US$2.95 billion in
\nfunds up to 2007 to develop four pipeline projects in the country
\nthat are aimed at meeting growing gas demand, according to a
\nsenior company executive.<\/p>\n
PGN president W.M.P. Simandjuntak said on Tuesday that the
\nexpansion program would be funded mainly from foreign loans.<\/p>\n
\"We will develop four pipeline projects up to 2007, namely
\nGrisik to Singapore, South Sumatra to West Java, East Kalimantan
\nto East Java, and East Java to West Java,\" he said at the Gas
\n2002 Indonesia conference.<\/p>\n
PGN needed about $470 million to develop the Grisik-Singapore
\npipeline, $480 million for the South Sumatra-West Java pipeline,
\n$1.2 billion for the East Kalimantan-East Java pipeline, and $800
\nmillion for the East Java-West Java pipeline, Simandjuntak said.<\/p>\n
\"At present, we have almost obtained one financing scheme for
\na 540-kilometer pipeline project from Grisik to Singapore,\" he
\nadded.<\/p>\n
Simandjuntak said the company had secured loans worth $420
\nmillion from the Asian Development Bank and the European
\nInvestment Bank for the development of the Grisik-Singapore
\npipeline project.<\/p>\n
PGN would also announce a strategic partner for the project
\nnext month in the form of a consortium that was expected to
\nprovide around $276 million in funds in exchange for a 25 percent
\nto 40 percent stake in the project, he added.<\/p>\n
According to Simandjuntak, there are four consortia bidding
\nfor the project, but he declined to disclose their names.<\/p>\n
He expected the construction of the gas pipeline to commence
\nin May or June this year, and to be completed sometime next year.<\/p>\n
The pipeline would become part of a pipeline linking gas
\nfields in South Sumatra with Singapore, via Batam, and to crude
\noil fields in Duri, Riau, operated by PT Caltex Pacific
\nIndonesia.<\/p>\n
Singapore Power would import 150 million standard cubic feet
\nper day of South Sumatra gas through the pipeline from mid-2003,
\nramping up to 350 mmscfd by 2009, for a total volume of 2.27
\ntscfd over 20 years.<\/p>\n
Simandjuntak said PGN's next project was to undertake the
\ndevelopment of the South Sumatra-West Java pipeline once a loan
\nfrom Japan worth $450 million had been disbursed.<\/p>\n
Last year, PGN agreed with state-owned oil and gas company
\nPertamina to allow the latter to deliver gas through the pipeline
\nfrom the Prabumulih gas fields in South Sumatra at a flow rate of
\n250 million metric standard cubic feet per day (mmscfd) starting
\nin 2005 in order to help meet growing demand for gas,
\nparticularly for power generation.<\/p>\n
Simandjuntak said PGN expected to develop the other two
\nprojects, the 1000-kilometer East Kalimantan-East Java pipeline
\nand the 680-kilometer East Java-West Java pipeline in 2005.<\/p>\n
\"We might seek loans worth $1.4 billion to finance the two
\nprojects ... but the numbers will become less and less if a
\nstrategic investor comes in,\" he said.<\/p>\n
According to one estimate, the country's gas demand will grow
\nby between 5 percent and 8 percent for the next few years.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pgn-needs-295-billion-to-develop-gas-pipeline-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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