PGN hopes to start major pipeline projects this year

State owned gas distribution company PT Perusahaan Gas Negara (PGN) hopes that it could begin its major pipeline projects linking Riau with North Sumatra, and South Sumatra with West Java in the middle of this year, Neraca reported on Wednesday.

Agus Diharjo, a senior executive of PT PGN, said in Jakarta on Tuesday that the company?s management hoped that the tender of the projects, which would cost about US$1.28 billion, could be launched in June.

Agus said that the construction works were expected to begin several months after the winner of the tender was announced.

PGN plans to issue bonds worth US$400 million to finance the projects. About $257 million of the funds have been raised from the recent issuance of the company?s Euro Bond I and Euro Bond II.

The company also expects to raise soft loans of about $415 million from Japan Bank for International Cooperation (JBIC) to partly finance the project. PGN will also use its own funds to finance the project. (*)