Japanese government has yet to decide on loan to PGN
Tuesday, September 19 2000 - 06:30 AM WIB
The Japanese government had yet to decide whether it would provide soft loans to Indonesia state gas distribution company PT PGN for the planned development of natural gas pipeline stretching from South Sumatra to West Java, PGN's commissioner Soepraptono Soelaiman said on Thursday.
"They (the Japanese government) have not yet made any decision because they have yet to get assurance that Indonesia has made preparations, including to ensure that (state oil and gas company) Pertamina is ready to develop its gas fields. The pipeline will be useless if there is no natural gas (to be supplied from South Sumatra to West Java)," Soepraptono said on the sidelines of the Indonesia International Oil and Gas Conference and Exhibition (IIOGE) at the Jakarta Convention Center.
The IIOGE was open today (Tuesday) and will last until Friday.
PGN's president A. Qoyum Tjandranegara earlier said PGN expected the Japanese government to provide a soft loan to cover 85 percent of the project's cost of US$850 million. The remaining 15 percent would be financed by PGN.
He also said a Japanese company was going to come to Indonesia on September 6 to examine whether PGN's project deserved the loan.
PGN has planned to build the pipeline to supply natural gas from Jambi and South Sumatra to the households, power companies and industries in the province of West Java.
West Java is the country's main industrial center, while Jambi and South Sumatra are rich with natural gas resources.
Supramu Santosa, vice president for administrative affairs with Gulf Indonesia Resources, which is the main gas producer in South Sumatra and Jambi, earlier told Petromindo.Com that as far as the South Sumatra-West Java pipeline project was concerned, gas producers in the provinces had yet to assured over demand, gas price and security payment.
"Security of payment should also be underlined. We have to be assured that the prospective buyers are bona fide and can afford the gas. Experiences during the economic crisis have shown that there are companies which are unable to make payments for the gas supplied to them," Supramu said. (godang and alex)