PGN?s SSWJ pipeline cost soaring

State gas distribution firm PT Perusahaan Gas Negara (PGN) is seeking additional loans to offset the increase in the development cost of South Sumatra to West Java (SSWJ) gas pipeline.

 

“The project cost soars to US$1.357 billion from $1.179 billion because of, among others, capitalized interest cost of loan during the implementation of the project,” company president Soetikno said in Jakarta on Wednesday.

 

Floods from Musi river in South Sumatra has forced PGN to delay the completion of 196-km gas pipeline linking Grissik to Pagardewa.

 

PGN, however, said that despite the delay in the construction of a 10km pipeline that will channel gas from American firm ConocoPhilips' gas fields, it was still committed to increasing its gas supplies to the South Sumatra-West Java pipeline by 170 million cubic feet per day (MMCFD) by the end of the year.

 

The Grissik-Pagardewa pipeline is part of PGN's two gas pipelines linking Pagardewa in South Sumatra to Cilegon in Banten, and Muara Bekasi in West Java. The first section to Cilegon has begun operation early this year, while the second section to Muara Bekasi is initially scheduled for operation in July. (godang)