PGN sends info memo to 15 strategic investors

The state-owned gas company Perum Gas Negara (PGN) has sent info memo to 15 strategic investors to invest in a pipeline project that would deliver natural gas from South Sumatra to Singapore, company president WMP Simanjuntak said Thursday.

He said that the investors were expected to submit bids in February, next year. He declined to name the investors, citing confidentiality agreement.

PGN plans to sell between 25 percent and 40 percent interest in the US$470 million project in a bid to raise around $200 million. The company has secured around $270 million from Asian Development Bank and European Investment Bank.

Report earlier said that investors interested in the project included Conoco Inc., William Co., Unocal, Texaco, U.S. investment firm AIDEC, Malaysia?s Petronas, Singapore?s SembCorp Industries, and Singapore Petroleum.

PGN plans to start construction of the pipeline project in April 2002. Singapore electricity company Singapore Power will import 150 million standard cubic feet per day (MMCFD) of gas beginning in mid-2003 through the pipeline, pumping up to 350 MMCFD by 2009, for a total volume of 2.27 trillion cubic feet over 20 years.

The natural gas will be supplied from the Corridor and South Jambi B production-sharing contract (PSC) areas, both operated by Gulf Indonesia Resources Limited, and from the Jabung PSC area operated by Devon Energy.

State-owned PGN faces contractual penalties if gas transmission to Singapore doesn?t start by November 2003. If it can?t build the pipe by that date, gas supplier Singapore Power and its customers may face gas supply delays. (Godang)