PGN allocates $500m for capex this year

IDX-listed gas distribution company PT PGN Tbk said it has allocated US$500 million for capital expenditure (capex) this year to be financed through internal funds, reports said on Monday.

PGN Director Nusantara Suyono was quoted as saying that the capex would be allocated for the company?s upstream and downstream business expansion as well as for routine maintenance.

He, however, declined to disclose the planned expansion in the company?s upstream and downstream businesses.

Bisnis Indonesia said that the 2016 capex is lower than the $1.25 billion capex in 2014, and $800 million last year. But Nusantara said that the realized capex last year was not far than the allocation made for this year.

As has been reported earlier, PGN?s upstream subsidiary PT Saka Energi Indonesia is planning to acquire oil and gas blocks to capitalize on lower valuation amid the current oil price drop.

In the gas distribution business, PGN has set a plan to develop more than 1,680 km of gas pipeline network in the period of 2016-2019. The company currently operates a total of 7,026 km gas pipelines, or accounting for 76 percent of total gas pipelines in the country. This has allowed the company to distribute a total of 1,591 mmscfd of gas to industry-scale customers, small-scale industries, and household customers.

Last year, PGN saw its net profit dropped by 43.5 percent to $401.19 million last year from the previous year?s, while net revenue fell by 5.86 percent year on year to $3.07 billion.(*)