Pertamina eyeing Sumatra-Singapore gas pipeline stake
Tuesday, April 30 2002 - 02:44 PM WIB
According to Upstream Director Iin Arifin Takhyan, Pertamina will get 9 percent of Transco I after PGN sells a 25 - 40 percent stake to a foreign investor.
The value of the 9 percent stake will be proportionate to the price paid by the foreign investor seeking up to 40 percent in the Sumatra-Singapore pipeline operating company, he said.
Widyatmiko Bapang, a PGN official acknowledged that Pertamina "is very eager to get that (9 percent stake), but an agreement is not yet in place."
"Of course, PGN will entertain Pertamina's offer," but both parties are "still in discussions," he said and stressed that PGN would like to maintain a majority stake of more than 50 percent.
There are two foreign investors vying for a stake in Transco I: a consortium led by Malaysia's Petroliam Nasional Bhd. while the other party is Korea Gas Corp. together with U.S. investment firm AIDEC Management Co.
The Petronas-led consortium, which includes Singapore Petroleum Co., Talisman Energy Inc. and Gulf Indonesia Resources Ltd., has submitted a bid for a 40 percent stake, and is hailed as a keen contender.
Transco I plans to develop the South Sumatra-Singapore gas pipeline, which will deliver about US$9 billion worth of natural gas over 22 years to Singapore starting 2003.
Funds from the stake sale will make up a US$250 million shortfall in financing for the US$477 million pipeline project slated for completion in August 2003.
The pipeline's construction will be partially financed by the Asian Development Bank, which has committed US$88 million in loans to PGN contingent upon the Transco I stake sale. (*)