Govt urged to soon hand over loan for S. Sumatra-W. Java gas pipeline project

State gas transmission and distribution company Perusahaan Gas Negara (PGN) expects the government to soon hand over to it the US$415 million in loan from a Japanese bank for the construction of South Sumatra-West Java gas pipeline.

?We hope that the Ministry of Finance and PGN will soon sign the transfer of the Japanese loan,? PGN?s finance director Djoko Pramono told Petromindo.Com Monday.

Djoko said that if PGN could receive the loan from the government soon, and if other administrative matters related to the loan provision were settled smoothly, the company could start constructing the 500-kilometer pipeline next year.

JBIC and PGN signed the loan assistance last month. According to official procedures, the loan will go to PGN only through the Ministry of Finance.

The pipeline project will cost around $485 million. It will stretch from Pagardewa in South Sumatra to Cimanggis in West Java.

The pipeline is planned to have an initial capacity to transmit 250 million cubic feet per day (MMCFD) of gas, which will eventually ramp up to 600-700 MMCFD at peak capacity. (godang)