PGN, WB in talks on fresh loan

Officials of state gas transmission and distribution firm PGN and the World Bank are in talks on the company?s request for fresh loan from the Bank, a PGN official told Petromindo.Com Friday.

?A World Bank team has arrived in Jakarta, and discussions with PGN officials are proceeding,? said the company?s development director Adil Abas Reksoatmodjo.

Adil said that PGN requested for a US$80 million loan facility from the Bank.

The loan will be used to help finance the South Sumatra-West Java gas pipeline project.

The Bank had previously disbursed US$6 million in loan to help finance PGN projects in East Java and financing for the company?s last month initial public offering (IPO) process.

PGN had planned to use a portion of its IPO proceeds to finance the construction of the 700-kilometer South Sumatra-West Java pipeline project. The pipeline is now under construction and is expected to be able to supply gas of between 600 and 1,000 million standard cubic feet per day (MMSCFD) by 2007.

Japan Bank for International Cooperation had also pledged US$415 million to partly finance the project.

PGN also has planned to build a 1,100 km-pipeline linking East Kalimantan and East Java. (godang)