PGN expects 25 percent increase in profit

PT Perusahaan Gas Negara, state-controlled distributor of the fuel, said it may boost profit "at least" 25 percent this year because of increased supply under a contract with Santos Ltd.

The company expects revenue from natural gas trading and transmission fees to rise 25 percent this year, President Director W.M.P. Simandjuntak told reporters in Jakarta on Monday.

A contract to buy gas from a field operated by Santos for resale in Indonesia's most populous island starts in August.

"We'll start selling 100 million cubic feet a day from Santos's field in East Java in August," Simandjuntak said.

"We're also going to sell more gas from Kodeco Energy Co., and PT Energi Mega Persada, but in smaller volumes."

PGN, 60 percent-owned by the Indonesian government, is benefiting from its ability to increase gas prices, unlike diesel and gasoline, which are regulated by the government.

Gas pricesfor industrial users climbed 15 percent on Oct. 15 and 10 percent on Jan. 1. The company relies on domestic sales and transportation fees earned from distributing gas.

PGN's net income increased 81 percent to Rp 862 billion (US$95.5 million) last year compared with a year earlier.

The company will spend Rp 10 trillion this year, Finance Director Djoko Pramono said Monday. Of that, about Rp 8 trillion will be used to complete the construction of the South Sumatra-West Java pipelines, while the rest will be used to expand transmission and distribution networks, he said. (Godang)