PGN secures $80 million World Bank loan for W. Java pipelines

State-owned gas transmission and distribution firm PT Perusahaan Gas Negara (PGN) will get a loan of about $80 million from the World Bank to partly fund pipelines in the western part of Java, Chief Financial Officer Joko Pramono told reporters Wednesday.

Pramono said PGN expected to sign the loan agreement with in October, while construction of the pipelines, valued at $125 million, will commence next year.

PGN has boosted sales by meeting demand for cheaper fuel after crude-oil prices surged to a record this year.

Pramono said PGN expected to double its profit by 2007 as gas sales will increase to 650 million cubic feet a day from 280 million currently. ?More people are turning to gas for fuel because it is cheaper than oil,? he added.

Pramono further said that the company may sell bonds or obtain new loans to fund the rest of the project and another project valued at $280 million, to build pipelines linking Duri gas fields in southern Sumatra to cities in northern Sumatra. (godang)