PGN new boss sets pipeline projects completion priority
Monday, November 26 2001 - 09:02 AM WIB
The state gas firm is in charge of constructing South Sumatra-Singapore pipeline, which would supply 325 million standard cubic feet per day of natural gas from South Sumatra gas fields to Singapore Power starting August 2003.
PGN is trying to raise money to finance the pipeline construction by spinning off its Grissik-Duri which transport gas from South Sumatra to Caltex and South Sumatra-Singapore gas pipeline into a separate entity called Transco and then would sell between 25 and 40 percent of Transco?s shares to strategic partners.
Simanjuntak said the strategic partners would be selected in February 2002.
He said the proceed would be used to partly finance the South Sumatra-Singapore gas project and some of the proceed from the divestment would be used to finance the ambitious South Sumatra-West Java pipeline which would bring South Sumatra gas to industrial provinces of West Java, Banten and Jakarta.
The US$ 486 million 32 inches South Sumatra ?West Java pipeline project would be capable of transporting up to 600 MMCFD of gas. The project is expected to become onstream in 2005.
The gas supply from the pipeline is expected to be able to supply the growing needs in West Java, where most of Indonesian industries are located.
PGN expected the project to be 85 percent financed by special yen loan from the government of Japan, which bears low interest rate.
Japan had initially agreed provide the loan. However, Japan then cancelled the loan because Indonesian government could no longer guarantee loan made by state owned enterprises.
Simanjuntak said Japan is currently considering to reinstate the loan and expected Japan government to give approval on march next year.
?The special yen loan is very important. The low interest loan would enable PGN to bring down transmission cost and therefore to cut gas sales price in West Java,? he said.
Simanjuntak added that beside completing gas pipelines projects, PGN is also seeking to be involved in gas retail business by opening 1000 gas stations for the next five year.
?We are now in talks with state oil and gas firm Pertamina on that matter,? he said.
Simanjuntak, who was inducted by minister of state enterprises last Friday to replace the outgoing Qoyum Tjandranegara, was formerly the company?s director of finance. (alex/godang)