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tate-run gas distribution company Perusahaan Gas Negara (PGN) is planning to disburse some US$800 million in capital expenditures (capex) this year, with most of the funds going to gas-pipeline projects.

In a statement published at the Indonesia Stock Exchange (IDX) on Tuesday, PGM said the $800 million in capex would be spent on infrastructure and its subsidiary companies.

'€œAbout $400 million to $500 million will be allocated for transmission and distribution pipeline projects, which can be multiyear projects depending on field conditions, permits, the gas-distribution condition and the country'€™s global economic condition. The remainder will be investments in our subsidiaries,'€ PGN corporate secretary Heri Yusup said.

That figure is similar to the company'€™s 2014 capex, when it allotted $500 million for the construction of gas networks.

'€œThe 2015 capex was made based on oil prices in 2014. We can still adjust the amount depending on the oil prices and the economic condition,'€ Heri said.

PGN projects this year include the development and enhancement of gas pipes in western and eastern Java, central Sumatra and Batam.

The publicly listed company will also continue plans to gradually develop gas networks for houses, as well as to support fuel-to-gas conversion in the transportation sector by developing 16 gas stations, providing mobile refueling units and procuring converter kits.

Earlier, PGN president director Hendi P. Santoso said the company would disburse around $32 million to construct gas stations this year.

Despite posting a 14.09 percent year-on-year increase in revenue on higher sales volume, PGN saw its net profit plunge by 8.22 percent in the first nine months of last year due to soaring costs resulting from the rising price of gas from suppliers.

An analyst, however, said that despite the drop in performance, the infrastructure development should help buoy the company in 2015.

According to a report by Ami Tantri of Credit Suisse, PGN is expected to record 5 percent volume growth in 2015 amid the better-than-expected performance of its gas suppliers and new demand from some projects in Central Java, including offshore transmission pipelines from Kepodang field to state-run electricity company PLN'€™s power plants and distribution pipelines to some industrial areas.

The company is currently working on a Kalimantan-Java pipeline that includes a 200-km pipeline connecting the Kepodang field in the Muria block off Central Java with the Tambak Lorok power plant, also in Central Java.

The pipeline, also known as Kalija I, is expected to be operational by August 2015, with a capacity of between 116 million standard cubic feet per day (mmscfd) and 120 mmscfd.

PGN previously calculated that the 1,200-km Kalimantan-Java pipe network would require around $1.7 billion, with the first phase '€” Kepodang to Tambak Lorok '€” absorbing some $200 million.

Ami'€™s report indicated she was confident PGN stocks, which are listed on the IDX under the code PGAS, would improve.

'€œBeing a US dollar earner in a defensive industry, PGN, in our view, is one of the stocks that investors should own for 2015 '€” given the strong outlook for the greenback,'€ the report said.

PGN stocks were traded at Rp 5,275 (42 US cents) apiece on Tuesday, up by about 1 percent from Rp 5,225 in the previous day of trading.