PGN's project to be finished in 2009

JAKARTA: State-owned gas distributor PT Perusahaan Gas Negara (PGN) plans to complete the construction of a pipeline from Kalimantan to densely populated Java in 2009, a year earlier than schedule.

President of the publicly listed company WMP Simanjuntak said on Monday that it had secured a grant from the Asian Development Bank for a more thorough feasibility study, which it was expected would be finished in the third quarter of this year.

"The cost of this project will be US$1.9 billion, including a pipeline from East Java to West Java," he said. The estimated investment is higher than what PGN pegged a year ago at $1.7 billion, due to an adjustment to the pipeline's route.

In a previous feasibility study, the government was projected to receive around $11 billion in revenue for 20 years from the massive gas pipeline. Financing is expected to be raised from foreign investors and PGN's equity. -- JP