PGN to Go Ahead With Investment Plans Despite Possible Takeover by Pertamina

Perusahaan Gas Negara (PGN), a state-controlled gas distributor in Indonesia, will continue with its investment plans despite possibility of takeover by Pertamina, says Jakarta Globe newspaper.

Hendi Prio Santoso, president director of PGN, told reporters on Thursday that the company is planning this year to invest Rp 15 trillion ($1.2 billion), of which about Rp 4 trillion to Rp 5 trillion will be used to finance the construction of a liquefied natural gas refinery and continued development of its floating storage regasification unit (FSRU) in Lampung.

“The LNG liquefaction plant will be a feeder base for new areas where we are planning to enter with pipe connections,” Jakarta Globe quotes Hendi as saying.

The company will also invest in distribution networks in Central Sumatra, Central Java and Papua, and that could potentially include providing gas to homes, the newspaper adds.

PGN’s investment plans this year may also include possible acquisitions, says Jakarta Globe.

On the topic of a possible takeover of PGN by Pertamina, Hendi declined to comment on specifics.

Last month media reports said that Indonesian government has allowed Pertamina to acquire PGN. The reports added that Pertamina is planning to merge PGN with Pertagas, which is Pertamina’s gas trading unit.

State-Owned Enterprises Minister Dahlan Ishkan had said that the ministry has hired investment bankers to look into the possible acquisition. Media reports say that PGN may possibly be acquired by Pertamina and be merged with Pertagas, which is Pertamina’s gas trading unit.

Hendi said the plan has not been communicated with PGN.

“There is no notification letter, no instruction, nor any direction,” Hendi said. “This kind of decision has to be made in a shareholders meeting, and we haven’t have any meetings yet.”

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