PGN sees revenues tripling in 2007
PGN sees revenues tripling in 2007
The Jakarta Post, Jakarta
State-owned gas utility company, PT Perusahaan Gas Negara
(PGN), on Wednesday projected that revenue from operations to
rise three fold in 2007 after completion of its massive pipeline
project in 2006, the company's top executive said.
PGN president director WMP Simandjuntak said the company was
optimistic for a significant rise in revenues after it completed
the construction of a US$1 billion pipeline project. The project
will link gas-rich regions in Sumatra with industrial areas in
Greater Jakarta, Banten and West Java.
"With the completion of the project, we expect our gas
distribution from South Sumatra will reach 950 MMSCFD (million
standard cubic feet per day) in 2007 from the current 334
MMSCFD," said Simandjuntak at a public briefing of reporters and
investors on Wednesday.
The construction of the project is expected to be completed in
mid 2006. Many industrial enterprises in West Java and Banten,
the nation's main industrial regions, are expected to switch from
oil to gas.
PGN has inked a deal with ConocoPhillips and state-owned oil
and gas producer PT Pertamina to supply some 3.3 trillion cubic
feet of gas worth Rp 52 trillion (US$5.77 billion) from Sumatra
to buyers in Java for a period of 17 years.
Simandjuntak said that around half of the gas volume had
buyers, with the remainder expected to be purchased by some 300
industrial plants currently on a waiting list.
PGN is estimated to reap between $200 million and $500 million
per annum from the deal, starting in 2007.
PGN also expects to generate higher sales from industrial
areas in East Java starting next year, after it signed an
agreement with Santos to supply 100 MMSCFD of gas valued at $654
million, and an agreement with Lapindo Brantas to supply 30-50
MMSCFD.
PGN's revenue from gas sales and distribution is estimated to
rise to Rp 4.3 trillion this year from Rp 3.6 trillion last year.
However, net profit in the first nine months of this year fell
49 percent to Rp 263.9 billion, from Rp 522.2 billion in the same
period last year. The fall was due to foreign exchange losses and
interest rate burdens on the company's debts.
Elsewhere, Simandjuntak said the company planned to construct
an integrated distribution pipeline that would link the entire
island of Java, from Bekasi in West Java to Gresik in East Java,
with an investment of $538 million.
The project is scheduled to start in 2008 and be completed by
2010. Gas supply will be derived from regions in Sumatra and
Kalimantan.
PGN shares ended higher by Rp 25 to Rp 1,425 on the Jakarta
Stock Exchange on Wednesday.