PGN to invest $1b in LNG receiving terminals

Nani Afrida , The Jakarta Post, Jakarta | Wed, 11/25/2009 9:30 PM

State gas producer PT Perusahaan Gas Negara plans to allocate US$ 1 billion to build Liquefied Natural Gas (LNG) receiving terminals in West Java and North Sumatra, an official revealed Wednesday.

“The investment in the terminals is about $100 million up to $150 million per unit,” [with some multiple units] PGN president director Hendi P Santoso told reporters during a hearing between PGN and the House of Representatives.

The company acknowledged that it was still seeking some loans from banks to finance the terminals.

“We probably will find 30 percent of the budget needed from the internal cash flow, with the rest from bank loans,” PGN finance director Riza Pahlevi Thabrani said.

It was reported that the company targeted to deliver a maximum of 400 million cubic feet per day in additional gas supply from the West Java LNG terminal, and up to 150 million cubic feet per day from the North Sumatra one.

For the West Java project, the company had established a partnership with state oil and gas producer PT Pertamina, and state power utility PT PLN.

Meanwhile, for the North Sumatra project, PGN would be fully in charge of the construction and operation of the project.

The company expected the projects to start operations in 2012.