Bakrie to seek partners to build gas project

PT Bakrie & Brothers, which is involved in various business ranging from steel manufacturing to telecommunication and plantations and is linked to Coordinating Minister of Public's Welfare Aburizal Bakrie, will seek partners to build and operate natural gas pipelines linking Kalimantan and Java islands.

Bakrie, Indonesia's biggest publicly traded metal products producer, won the right from downstream oil and gas regulator, BPH Migas on July 17 to build 1,115 kilometers of pipelines at a cost of $1.26 billion. The company plans to finance 70 percent of the project by loans and the rest through equity, Finance Director Yuanita Rohali said Friday.

"We may seek a partner, we're open to anybody," Rohali said. "We have a pipeline manufacturing and construction unit. The profit from them will be enough to fund part of the equity," The Jakarta Post reported Saturday

Deutsche Bank AG, Malaysia's CIMB Bhd., and Japan's Sumitomo Mitsui Banking Corp. and Mizuho Corporate Bank Ltd. may fund the project, Saryono Hadiwidjoyo, head of the tender team of the project said on July 19. Bakrie will conduct a "beauty contest" to select where it will get the loans from, Bobby Gafur Umar, the company's president director said on July 18.

Bakrie needs at least six months from July to start building the building the pipelines, Umar told reporters in Jakarta on July 18. The government wants the pipelines to be completed by July 2009.

Most of the pipes would be provided by Bakrie's subsidiary PT Bakrie Pipe Industries, Umar said.

"We'll start the field's activities in January 2007, including land preparation," A.D. Airlangga, Bakrie's vice president of infrastructure support, said Friday. (*)