PGN expects to secure US$80 million loan from WB

State owned gas distribution company Perusahaan Gas Negara (PGN) expects to raise loans worth about US$80 million from the World Bank to finance its pipeline project in West Java, Koran Tempo reported on Thursday.

Adil Abas, PGN's director of development, said in Jakarta on Wednesday that PGN had received an approval from the Ministry of Finance to negotiate the details of the loan with the WB's representatives.

"We hope we could soon begin the negotiation," he was quoted as saying. According to him, the negotiation was initially scheduled to be held on Wednesday but it was delayed due to a number of problems.

According to him, the loan would be used to finance the construction of pipelines in several parts of West Java. The new gas lines would be connected to the inter-island gas pipeline project, which will supply gas from Pagar Dewa gas field in South Sumatra to West Java.

The inter-island pipeline, which will cost about US$1 billion to build, will have the capacity to supply 50 million standard cubic feet per day (MMSCFD). The gas from the new pipeline is expected to go on stream in early 2007. (*)