PGN to build East Kalimantan-Java pipeline<\/p>\n
PC Naommy, The Jakarta Post, Jakarta<\/p>\n
State-owned gas distributor PT Perusahaan Gas Negara (PGN)
\nunveiled on Wednesday plans to develop a US$1.7 million pipeline
\nrunning from East Kalimantan to Java.<\/p>\n
PGN director of development Adil Abas told The Jakarta Post
\nthat the prelaunch was intended to open a discussion with several
\nfield experts for their input on the project.<\/p>\n
\"This is a big project that will involve big money -- that's
\nwhy we have to conduct a comprehensive study to determine whether
\nit's feasible,\" he said.<\/p>\n
Adil said PGN had received a $650,000 grant from the USTDA
\n(United States Trade and Development Agency) for a feasibility
\nstudy. PGN has also consulted with the Asian Development Bank
\n(ADB) and the World Bank in regards financial assistance.<\/p>\n
So far, three international financial institutions have
\ncommitted soft loans for the PGN pipeline project. The ADB will
\nis to provide $250 million, the European Investment Bank (EIB)
\nhas offered $100 million and the World Bank, $100 million.<\/p>\n
PGN has allocated $320 million of its own capital for the
\nproject.<\/p>\n
Besides providing an improved gas supply for Java, the project
\nwill also bring investment to upstream and downstream industries
\nthat will help boost economic recovery in the country, said Adil.<\/p>\n
\"The project will improve economic growth in the provinces,
\nespecially in East Kalimantan, Central Java, East Java and West
\nJava,\" he said.<\/p>\n
He added that the pipeline project would also help develop a
\nbetter source of energy to support the government's blue sky
\npolicy as it would provide environmentally friendly fuels.<\/p>\n
Adil said the gas would be sourced by several East Kalimantan
\ngas fields, and that the company planned to conduct further
\nstudies to determine those gas fields to be tapped.<\/p>\n
In regards potential investors, Adil said several investors
\nwere interested in the project, but would likely wait until the
\nresults of the feasibility study, which are to be presented at a
\nfinal workshop scheduled for Feb. 26.<\/p>\n
The project includes a 1,600-kilometer pipeline to supply
\n1,000 million metric standard cubic feet per day (MMCFD) of
\nliquid gas from East Kalimantan to East Java and West Java.<\/p>\n
A study has projected that, with an annual economic growth of
\n3 percent to 6 percent, gas demand in Java will grow by 4.9
\npercent to 8.3 percent annually.<\/p>\n
In addition, Java's gas demand is projected to reach between
\n2.0 billion cubic feet per day (BCFD) to 2.5 BCFD by 2010 and
\nbetween 3 BCFD to 6 BCFD by 2025.<\/p>\n
PGN is also developing another pipeline from Pagardewa, South
\nSumatra, to Cilegon, West Java, that will stretch 499 km. The
\ncompany is currently selecting consultants to prepare necessary
\ndocuments for the Pagardewa-Cilegon pipeline project.<\/p>\n
Adil said that the project was scheduled to commence at the
\nend of this year and too finish in mid-2006.<\/p>\n
West Java's gas demand is projected to reach 130,000 MMSCFD by
\n2006.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pgn-to-build-east-kalimantan-java-pipeline-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
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