Pertamina ready to invest in PGN pipeline project

The state-owned oil and gas firm Pertamina is ready to invest in the 470 km gas pipeline project connecting South Sumatra and Singapore to be developed by the state-owned gas distribution company PGN to help avoid delay in the project amid growing concerns of financing shortage.

?Since the beginning we have offered our participation in the project. But the realization must still be discussed with various parties involved in the project,? Pertamina finance director Ainun Naim was quoted by the evening Suara Pembaruan daily as saying.

He added that Pertamina had talked about this with PGN last week. But he declined how much money Pertamina was ready to chip in.

There has been concern that the project, which is supposed to be completed in August next year to allow gas delivery to Singapore on time, might be delayed amid financing difficulties.

Reports said that until now PGN has not been able to obtain financing from the Asian Development Bank (around US$88 million) and the state-owned Bank Mandiri ($150 million) for the development of the $477 million project.

The gas to Singapore will come from the Corridor Block in South Sumatra, operated by Gulf Indonesia Resourecs. (*)