Construction of South Sumatra-Singapore gas pipeline will begin in July
Friday, June 14 2002 - 03:34 AM WIB
Speaking at a hearing with members of the Commission VIII of the House of Representatives (DPR), PGN?s president director, MWP Simandjuntak said that the preparation of the installation of the pipes in the Singapore-South Sumatra gas grid had been completed including the procurement of the pipes for the project.
"We are sure that the project could be started as scheduled so that we will escape a penalty," he was quoted as saying. He added if the construction of the pipeline could be started in July, the whole project would be able to be completed in August 2003, or two months ahead of the November target.
According to Simandjuntak, so far there has no problem with the project and every thing is under control. He dismissed fears that the pipeline project could be delayed due to uncertainties in the funding. If the project is not completed as scheduled, PGN is required to pay a penalty of US$80,000 to potential buyers of the gas in Singapore.
"Although there is two weeks of tolerance time, we will try to complete the project on schedule," he added.
About US$88 million of the costs of the projects will be obtained from the Manila-based Asian Development Bank (ADB), US$93 million from European Investment Bank (EIB) and US$196 million from PGN?s own funds, and another $150 million from Bank Mandiri.
The planned sales of the natural gas from the Corridor Block gas field in South Sumatra was signed by Pertamina and Singaporean buyers in November 2001. Pertamina earlier signed a similar agreement to supply the neighboring country from West Natuna gas fields which are currently developed by Conoco, Gulf and Premier Oil Ltd.
PGN said that the 470-kilometer gas grid linking Grissik in South Sumatra, Sakernan, Batam and Singapore would have a capacity to transmit 350 million standard cubic feet per day (mm-scfd). The project requires investment of $477 million, while the gas will be supplied by Gulf Indonesia.
Vice President of Gulf Indonesia Resources, Supramu, said that he was also optimistic that the transmission of gas from the company?s gas field to Singapore through the pipeline could be started as schedule. (*)