Transco I stake sale deadline extended

Transco I stake sale deadline extended

Dow Jones, Singapore

The deadline for bids for a 25 percent to 40 percent stake in state-owned PT Perusahaan Gas Negara's pipeline developing unit, Transco I, has been delayed until March 26, six weeks behind schedule, PGN said Monday.

Transco 1 plans to develop the South Sumatra-Singapore gas pipeline, which will deliver about US$9 billion worth of natural gas over 22 years to Singapore starting 2003.

The delay arose as Singapore's PowerGas Ltd.-led consortium and Korea Gas Corp., or Kogas, requested more time to submit their final bids, said PGN corporate secretary, Widyatmiko Bapang.

"Kogas hasn't done its due diligence" for the tender, said Widyatmiko. He added that some commercial documents weren't made available to bidders until last week, stalling Powergas's final bid submission.

The latest deferment in the sale of the Transco I stake could delay Singapore's import of gas from Indonesia, contractually set to begin second-half 2003.

Funds from the stake sale will make up a $250 million shortfall in financing for the pipeline.

The $477-million pipeline project is slated for completion in August 2003.

The pipeline construction will be partially financed by the Asian Development Bank, which has committed $88 million in loans to PGN contingent upon the Transco stake sale.

"Asian Development Bank has agreed to give the approval for the pipeline tender (award), ahead of the appointment of a strategic partner in Transco I," said Iwan.

A consortium led by Malaysia's Petroliam Nasional Bhd, or Petronas, and a partnership between Unocal Corp. and El Paso Corp. have also submitted bids for a stake in Transco 1.

The Petronas-led consortium includes Singapore Petroleum Co., Talisman Energy Inc. and Gulf Indonesia Resources Ltd.. PowerGas, a unit of Singapore Power, will bid together with Williams Co. and Indonesian pipeline developer, PT Trans Nusantara Multi Construction, or Tranaco.