JBIC, PGN sign 49 billion yen loan for S. Sumatra-W. Java gas pipeline project

The Japan Bank for International Cooperation (JBIC) said Thursday it had signed a special official development assistance loan agreement for around 49,088 million yen (US$ = Y119.75) with Indonesia's state-owned gas transmission and distribution firm PT Perusahaan Gas Negara (PGN) so as to enable the latter to construct South Sumatra-West Java gas pipeline project.

JBIC said the loan would be used to procure equipment and materials, and pay for civil works and consulting services related to project supervision, implementation and maintenance.

According to JBIC, the project covers 270 kilometers of pipeline overland and 105 kilometers underwater, from Pagardewa in South Sumatra to Cilegon (Banten), with pipes of a diameter of 32 inches, and 129 kilometers overland from Cilegon to Cimanggis with pipes of a diameter of 24 inches.

?This project aims at linking West Java with Sumatra Island where there is still room for additional supplies. It will thereby address projected gas supply shortages in this region and, at the same time, promote efficient use of resources by making effective use of unused natural gas in Sumatra,? JBIC said in the statement.

Earlier reports said the project, which was planned to start late this year, required a total cost of $485 million. It was planned to start late this year, and first gas was expected to flow in 2005 or 2006.

The pipeline will transport 250 million standard cubic feet per day (MMCFD) of gas, ramping up to 700 MMCFD. (robert)