State-owned gas distributor PT Gas Negara (PGN) expects that its Trans Sumatra-Java-Bali gas pipeline will be fully integrated by 2021 as the company embarks on several projects this year
tate-owned gas distributor PT Gas Negara (PGN) expects that its Trans Sumatra-Java-Bali gas pipeline will be fully integrated by 2021 as the company embarks on several projects this year.
According to PGN president director Hendi Prio Santoso, in 2013 and 2014, PGN will work on several short-term projects, which include an 80-kilometer pipeline in Lampung, a 350-kilometer pipeline in Central Java, and a 500-kilometer pipeline passing through Duri and Dumai in Riau province and Medan in North Sumatra.
PGN expects the Lampung pipeline will be able to distribute 80 million standard cubic feet per day (mmscfd) of liquefied natural gas (LNG), the Duri-Dumai-Medan pipeline 120 mmscfd, and the Central Java pipeline between 50 mmscfd and 100 mmscfd.
The Lampung project is ongoing and is scheduled to finish by the end of this year or early 2014 at the latest. To connect the provinces of Riau and North Sumatra, PGN will extend the pipeline it has built in Duri and construction will begin in 2014.
Meanwhile, the Central Java project will consist of several phases. In the first phase, expected to complete in 2015, the company will establish a 45-kilometer pipeline connecting Semarang and its surrounding areas.
During the next phase, PGN will continue by linking Semarang with Ungaran, Solo and Pekalongan.
'At the same time, we are also conducting feasibility studies in East Java and Bali. Preparations for the work will take place in 2014,' Hendi said, following the company's annual shareholders' meeting in Jakarta on Wednesday.
He added that the entire Trans Sumatra-Java-Bali project would take around eight years to complete.
As part of the project, PGN took over participating interests in two gas blocks last month. Through subsidiary PT Saka Energi Indonesia, PGN acquired a 20-percent participating interest in the Ketapang PSC in East Java from Sierra Oil Services Ltd. The block is currently operated by Petronas Carigali.
It also acquired a 30 percent participating interest in the Bengkanai PSC in Central Kalimantan from Salamander Energy plc. Both acquisitions cost about US$100 million, Hendi said.
Publicly listed PGN is preparing between $250 million and $500 million in this year's capital expenditure budget for its short-term projects and other regular LNG activities.
The company is looking to take on higher participating interests in three other gas blocks and is preparing a maximum of $1 billion of its internal funds to finance the acquisitions.
'For now, we will still use our own funds because our cash position is strong, but we have received several financing offers, which are worth around $2 billion,' he added.
As of December 2012, PGN's cash and cash equivalents stood at $1.57 billion.
Meanwhile, during the meeting, PGN's shareholders approved a dividend payment proposal. The dividend payment is set at Rp 202.77 (2 US cents) per share, or Rp 4.9 trillion in total, up 53.1 percent from the previous year. The dividend figure represents 58.8 percent of its total net profits and the payment will take place in late May.
Last year, PGN saw its net profits jump 30.8 percent to $890.89 million and its revenues surge 16 percent to $2.58 billion, thanks to flourishing business. The company benefited from increasing gas sales and gas transmission volumes, and higher selling prices.
PGN's shares, traded under 'PGAS', closed at Rp 5,950 on Wednesday, a 0.8 percent rise from the previous day.
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