Luxembourg, Netherlands promise US$100m for PGN?s pipeline project

The Netherlands and Luxembourg are ready to provide US$50 million respectively in export credit for Indonesian state gas distribution company PT PGN to finance the development of its gas pipeline project linking South Sumatra to West Java, PGN said on Thursday.

PGN?s president A Qoyum Tjandranegara said both countries voiced their readiness to provide the soft loands during his recent visit to both countries.

Qoyum said he also approached the Italian, British and French governments during the visit but the three countries refused to make any commitment.

He said the Dutch and Luxembourg governments would provide the loan through European Investment Bank (EIB).

?EIB staffers will arrive next week to inspect the project?s locations,? Qoyum told Petromindo.Com on the sidelines of the deliberation of the oil and gas bill at the House of Representatives.

PGN plans to build a 640-kilometer pipeline to transport natural gas from the gas and oil rich province of South Sumatra to the industrial centers in West Java.

Qoyum went to Europe, after failing to secure loans from the Japanese government for the $900 million project.

The Japanese government once appeared to be willing to finance the project but, Qoyum said, talks between PGN and the Japanese government had thus far brought no fruits and the Japanese had recently suspended the talks given uncertainties in Indonesia?s political situation. (Godang)