Bakrie in talks with Daewoo to finance Kalimantan to Java pipeline project
Tuesday, September 25 2007 - 02:59 AM WIB
JSX-listed firm Bakrie& Brothers is negotiating vendor financing of US$550 million with South Korean firm Daewoo to fund the former?s Kalimantan to Java pipeline project, CFO Yuanita Rohali said as quoted by Bisnis Indonesia Daily.
She also said that Bakrie has also prepared option to issue $550 million bonds in case vendor financing deal failed, adding that the $550 million financing was equivalent with 435,000 tonnes of steel pipe.
Bakrie was awarded right to develop the 2,000-km pipeline project in 2006, with investment cost expected to reach $1.2 billion. Doubts linger on the feasibility of the project as gas supply from East Kalimantan are limited and might not be enough to meet economical supply of 1 BCFD. (*)