Pertamina prefers Pertagas, PGN joint committee

State-owned oil and gas firm PT Pertamina prefers its gas distribution subsidiary PT Pertamina Gas (Pertagas) to set up a joint committee with state-controlled gas distribution firm PT PGN Tbk as a form of synergy to resolve the problem of overlapping gas pipeline projects and distribution areas, reports said Thursday.

Under the plan, Pertagas and PGN will assign senior managers to sit in the committee to discuss cooperation in the utilization of gas distribution pipelines and to determine which distribution areas can be jointly developed.

Pertagas President Director Hendra Jaya was quoted as saying that Pertamina has agreed to the joint committee option, instead of the merger option proposed by the Office of the State Minister of State-Owned Enterprises (SOEs). PGN, however, has yet to give its approval.

He added that the proposed cooperation between the two firms via joint committee mechanism is also in line with existing regulation and the instruction of the SOE Ministry for SOEs to form synergy.

Elsewhere, Hendra said that if the merger option is taken, Pertamina wants to have shares in the merged company. (*)