Pertamina raises $1.13b to finance 8th LNG plant

JAKARTA (JP): State oil and gas company Pertamina has secured a US$1.13 billion syndicated loan to finance the building of its eighth liquefied natural gas (LNG) plant in Bontang, East Kalimantan.

Pertamina spokesman Didi Sunarwinadi said yesterday the loan agreement was signed in Paris on March 4.

Bank of Taiwan arranged the syndicated loan which involved The Chase Manhattan Bank, Banque Indosuez, The Fuji Bank Ltd., The Long Term Credit Bank of Japan Ltd., The Tokai Bank Ltd. and Mitsubishi Corp.

The loan itself would not burden the government's future debt servicing because it would be repaid using the proceeds from the sale of LNG to be produced by the plant, called the H plant, Didi said.

In addition, the loan would not be recorded in Indonesia's foreign debts because the funds were raised using the so-called trustee borrowing scheme, Didi said.

Under the scheme, Pertamina raised offshore borrowings through a trustee bank, Bank of America National Trust and Saving Association.

Didi said Pertamina got approval from the offshore commercial loan supervisory team last October to borrow the money for the plant.

Pertamina has six LNG plants in Bontang --- plants A to F -- and its seventh, G plant, is under construction with an expected annual capacity of 2.6 million tons of LNG.

G plant will raise LNG production at Bontang to 18.5 million tons a year.

Pertamina needs the eighth plant to meet the demand created by its new 20-year LNG contracts with Taiwan's Chinese Petroleum Corp. and South Korea's Korea Gas Corp.

The contracts state Pertamina must sell 2.84 million tons of LNG to Taiwan and one million tons of LNG to South Korea a year from the year 2000.

The building of H plant, which is being built by local contractors PT Inti Karya Persada Teknik and Bimantara, is scheduled to start in March and be completed in November 1999.

The new plant is expected to be the world's largest LNG plant with an annual capacity of 2.95 million tons of LNG a year.

Pertamina operates six other LNG plants in Arun, Aceh. (rid)