PGN to expend $400 million for CNG project

State-owned gas distribution firm PT Perusahaan Gas Negara (PGN) plans to spend US$400 million by 2010 developing compressed natural gas (CNG) projects to deliver the fuel to more areas of the country, Bloomberg reported Monday.

PGN may develop plants that make CNG, compressed to less than 1 percent of its usual volume, using gas from South Sumatra and Sebuku island, the company's Development Director Adil Abas said in Jakarta.

PGN will start selling CNG from South Sumatra to customers in Bandung, West Java next year, he said.

The customers, who will get as much as 2 million standard cubic feet a day, have agreed to pay about $8 per million British thermal unit for the gas, abas added.

The company aims to sell 10 million standard cubic feet a day of CNG from South Sumatra to cities, including Jakarta and Surabaya, East Java in 2007.

Earlier, PGN drew up a plan to develop CNG project, offtaking gas from Pearl Oil-operated Sebuku PSC offshore East Kalimantan to be transported to industrial users in the city of Maksasar, South Sulawesi.

PGN would cooperate with Houston-based EnerSea Transport LLC, a company that claimed to be the world's first company to provide a truly cost-effective CNG marine transport and storage system ? VOTRANS, for the project.

The project to become onstream in 2009, PGN said. (*)