Japanese team assesses PGN?s gas transmission project
Friday, March 8 2002 - 02:17 AM WIB
"A team from Japan is currently assessing the project, and we hope the Japanese government would approve the financing soon after the team returns to their country," PGN?s president director WMP Simandjuntak said on Thursday.
He said that if the Japanese government did not approve the financing of the project until the end of this month, the state owned gas company would go to Japan and renegotiate the loan proposal. "We hope that the soft loan would be included in the Japanese government?s current budget which would end in March 31. After this fiscal year, no more soft loans are available," he added.
The Japanese government, in principal, has agreed to provide soft loan worth US$415 million to finance the West Java ? South Sumatera gas pipeline project. The loan which would be disbursed through Japan Bank for International Corporation (JBIC) will carry interest rate of 0.75 percent per annum. The loan maturity will be 40 years, with a grace period of 10 years.
PGN needs about US$486 million to finance the construction of the gas transmission network which will pass through Pagar Dewa in South Sumatera, Cilegon, and Cimanggis in West Sumatera. US$415 million of the total funds are expected to be financed by the Japanese soft loans. The project is part of the cooperation agreement between PGN and Pertamina in the distribution of gas in Java.
PGN also plans to build a gas transmission project linking South Sumatera and Singapore. The company has opened the tender for the construction of the five sections of the gas pipeline project, which is expected to be commenced in June this year.
The gas transmission network, which would link Grissik, Sakernan, Batam and Singapore, will cost about $477 million, and will be financed by Japan Bank for International Corporation, Asian Development Bank and the World Bank. (*)