PT Perusahaan Gas Negara Tbk (IDX: PGAS) planned to develop distribution pipe in several cities in Indonesia to accelerate the gas sale, said the chief executive on Monday (08/26) - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesia’ gas producer and distributor, PT Perusahaan Gas Negara Tbk (IDX: PGAS) planned to develop distribution pipe in several cities in Indonesia to accelerate the gas sale, said the chief executive on Monday (08/26). To finance the projects, the state-owned company prepared capital expenditure US$700 million in 2020.

“We has several targets to enlarge the types of gas supply and the customers base including refineries and regular buyer through our gas network,” CEO Gigih Prakoso told the media.

The state-owned enterprises has a mandate from the government to deploy 78,000 household gas network in 2019. To date, the number of household gas network are reached 564,000.

Beside from internal cash, the unit of PT Pertamina, also seeks external funding to finance the expansion. Recently, he said, the company has planned to seek funds with worth of $500 million in this year.

Prakoso revealed the funds will be met by bank loan and global bond. Recently, the company has received loan from PT Bank Mandiri Tbk (IDX: BMRI) $350 million. He states, “Global bond will become one the sources. We have a plan to issue global bond but we can’t disclose the time and value.”

The commercial director, Danny Praditya added Perusahaan Gas Negara planned to build distribution pipe from Semarang to Grissik in East Java and surrounding Dumai city in Riau province. While, its unit PT Pertagas and PT Pertagas Niaga aimed to develop oil refineries in Subang, Cilacap, and other areas.

SAKA ENERGY

Talking about its unit, Finance Director of PGAS Said Reza Pahlevi explained, the company considered to divest minority stake in PT Saka Energy. Other option is release the same amount shares through initial public offering in the stock market. No further details on the planned.

“We are currently exploring to find a partner after releasing Sanga-sanga block, which contribute 40 percent of the total PGAS production. We will also improve Saka’ financial performance by extending the Panka BV development,” he added.

Early of this year Perusahaan Gas Negara has acquired PT Pertamina Gas (Pertagas) for Rp20.18 trillion (US$1.41 billion), after the SOEs ministry decided form an energy holding under Pertamina. The ministry was officially established the energy holding on April 11, 2018.

In details, the takeover payment scheme will be carried out in two stages. First, 50 percent of the total purchase price or equivalent to Rp10,09 trillion will use the cash payment scheme. Secondly, the company will issue a Promissory Note for the rest of the shares

By this process, Pertamina will direct PGAS to manage the gas business in an integrated manner in Indonesia as stipulated in Government Rule Number 6 Year 2018. Moreover, the company added gas processing and utility business lines, also accumulated additional liquefied natural gas (LNG) portfolio and strengthen its gas distribution and transmission business.

The Pertagas acquisition values of 40.77 percent of PGAS equity, based on September 2018 financial statement. In that period, the gas producer’ equity recorded at $3.31billion, while the liability was $3.34 billion.

At the end of 2018, Perusahaan Gas Negara liability jumped 41 percent to $4.73 billion with short-term liability increased almost double. The promissory note has given another burden to company’s financial structure.

But the company still gained  profit, as it spiked by 54 percent from $196.9 million in 2017 to $304.99 million in 2018. While, the revenues increased by eight percent to $3.87 billion. PGAS shares owned 56.96 percent by Pertamina and 43.03 percent by public.

by Linda Silaen, Email: linda.silaen@theinsiderstories.com