PGN seeks to set up SPC for Sumatra gas project<\/p>\n
Fabiola Desy Unidjaja
\nThe Jakarta Post\/Medan<\/p>\n
State-owned gas distributor Perusahaan Gas Negara (PGN) is slated
\nto establish a special purpose company (SPC) to help finance its
\nkey pipeline project linking gas fields across Sumatra.<\/p>\n
PGN president director W.M.P. Simanjuntak said in Medan, North
\nSumatra, on Thursday his company would only ask for 15 to 20
\npercent of the shares in the SPC, while the remaining shares
\nwould be offered to investors.<\/p>\n
The 650-kilometer pipeline, which will link Duri gas field in
\nRiau to electricity firm Asahan Power, requires some US$405
\nmillion in total investment. The completion of the first phase of
\nthe project is slated for July 2007.<\/p>\n
\"We will complete the financial scheme for the pipeline
\nproject in March and interested investors will be invited in
\nApril,\" Simanjuntak said.<\/p>\n
While refusing to name specific investors, Simanjuntak said
\nseveral foreign investors had expressed interest in the
\nestablishment of the company, though they were waiting to see
\nwhat sort of financing scheme PGN had in mind.<\/p>\n
The scheme would be discussed in more detail at the upcoming
\ntripartite meeting between PGN, Asahan Power and Duri's field
\noperator, he added.<\/p>\n
To attract investors, he continued, PGN would introduce a
\nhybrid system in the construction of the pipeline -- which would
\nallow the gas to be tapped before it reached the end of the
\npipeline in Belawan, North Sumatra.<\/p>\n
\"The pipeline project will also open up business opportunities
\nfor local administrations to participate in the distribution of
\nthe natural gas within their respective regions and support local
\nindustries,\" added Simanjuntak.<\/p>\n
The company's top executives are on a roadshow to areas to be
\naffected by the pipeline, which will pass through North and South
\nSumatra, Riau and Jambi.<\/p>\n
In a meeting with North Sumatra Deputy Governor Rudolph
\nPardede on Thursday, PGN also sought support from authorities to
\nprovide guarantees to avoid problems related to land acquisition
\nand permits.<\/p>\n
In his response, Rudolf promised that there would be minimum
\ndisturbances in the construction and operation of the project,
\nand that he would set up a meeting with regents in the province
\nwhose regencies would be affected by the project.<\/p>\n
\"We will try to minimize possible disturbances from the public
\nand local authorities, by starting to promote the project, as
\nwell as the benefits it could bring for local people, as soon as
\npossible,\" the deputy governor said.<\/p>\n
He added that the pipeline would also support the province's
\nplan to build a gas-fired power plant there with a capacity of
\n1,000 megawatts.<\/p>",
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