PGN seeks soft loan from Japan to build Sumatra-Java pipeline<\/p>\n
JAKARTA (JP): State gas distribution company PT Perusahaan Gas
\nNegara (PGN) is seeking about US$765 million in a soft loan from
\nJapan to finance the development of a gas pipeline linking South
\nSumatra and West Java.<\/p>\n
Company finance director WMP Simanjuntak said on Wednesday
\ntotal investment for the project was estimated at $900 million,
\n$135 million, or 15 percent, of which would be provided by PGN
\nfunds.<\/p>\n
"The soft loan we are seeking is part of the special loan
\npackage being offered by Japan's Overseas Economic Cooperation
\nFund (OECF) for Southeast Asian countries," Simanjuntak told The
\nJakarta Post after a ceremony to award the International Standard
\nOrganization (ISO) 9002 certification for the company's Jakarta
\ndivision.<\/p>\n
According to Simanjuntak, OECF had allocated a soft loan
\npackage amounting to $6 billion to support the development of
\ninfrastructure in the region for three years.<\/p>\n
The soft loan, with a maturity period of 40 years, including a
\ngrace period of 10 years, carries an interest rate of 1 percent
\nper annum.<\/p>\n
OECF has not yet decided the loan amount to be given to
\nIndonesia.<\/p>\n
The Indonesian government has proposed three infrastructure
\nprojects -- Mass Rapid Transport in Jakarta, the double track
\nrailway linking Jakarta and Surabaya and the natural gas pipeline
\nlinking South Sumatra and West Java -- receive monies from the
\nfund.<\/p>\n
"Thus far, only PGN has submitted an implementation program to
\nthe fund. We have received information saying the fund is
\nconsidering our program," Simanjuntak said, expressing optimism
\nthe company could secure the loan in the near future.<\/p>\n
PGN data says the South Sumatra-West Java gas pipeline will be
\ndivided in three sections measuring 900 kilometers (km) in total
\nlength. The pipeline will channel gas from South Sumatra to a
\nmultitude of manufacturing companies in West Java.<\/p>\n
The first section of the pipeline is a 370 km pipeline linking
\nthe South Sumatra capital of Palembang with Cilegon in West Java.<\/p>\n
The second section is a 150 km pipeline from the gas corridor
\nblock of Canadian oil and gas company Gulf Resources to
\nPalembang.<\/p>\n
The third section is a 280 km pipeline from Cilegon and
\nSubang, also in West Java.<\/p>\n
PGN president Abdul Qoyum Tjandranegara said he hoped PGN
\nwould receive the soft loan by September so that the company
\ncould start the project early next year.<\/p>\n
Qoyum said PGN would build a pipeline to channel natural gas
\nfrom central Sumatra to Singapore through Batam Island.<\/p>\n
He said PGN, though ready to build the pipeline, had delayed
\nthe project because the gas producer -- state oil and gas company
\nPertamina and its contractors -- had not reached an agreement
\nwith the buyer -- Singapore Power -- on the price of the gas.<\/p>\n
Last year, PGN finished the construction of a 544 km gas
\npipeline to channel gas from South Sumatra to PT Caltex Pacific
\nIndonesia's oil field in Duri. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pgn-seeks-soft-loan-from-japan-to-build-sumatra-java-pipeline-1447893297",
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