SOE Asks for Pertagas-PGN Acquisition to be Done at August

INDUSTRY.co.id - Jakarta - The Ministry of State-Owned Enterprises (BUMN) requested the acquisition of PT Pertamina Gas (Pertagas) by PT Perusahaan Gas Negara Tbk (PGN) to be completed no later than August 2018.

According to Deputy Minister of Mining and Strategic Industries Ministry of SOEs Fajar Harry Sampurno in Jakarta, Sunday (20/05/2018) it hopes all parties can carry out well what has been decided by the government related to holding state-owned oil and gas.

"This includes the Pertagas consolidation scheme with PGN, which aims to establish PGN as subholding Pertamina's gas business," said Dawn Harry Sampurno.

He explained that in the early stages of oil and gas holding, there were three options for the consolidation scheme of PGN and Pertagas, namely Pertamina's merger, inbreng (equity participation) in Pertagas to PGN, and Pertagas shares acquisition by PGN.

"Among the three options, the Ministry of SOEs ultimately makes choices on the acquisition scheme, for reasons that are faster than mergers," he said.

Fajar estimates that the acquisition process will be completed within four months since the holding of the state-owned oil and Gas Company was established on April 11, 2018, or to be completed by August 2018, while the merger process could be more than one year.

"The merger option is cheaper because it does not require cash to complete it, but it dilutes the authority of both companies, while the acquisition requires large amounts of funds, but it gives absolute authority to the buyers," Fajar explained.

He mentioned, the publication of the blessing of the Ministry of SOEs, so that PGN acquired Pertagas has been through careful consideration and evaluation.

BUMN data states, PGN has a number of productive assets more than Pertagas which is now a subsidiary of Pertamina.

PGN has started pioneering the development of gas pipelines in Indonesia since 1974.

Until the end of the first quarter of 2018, PGN operates 7453 kilometers (km) of gas pipelines, while Pertagas only manages the 2,438 km gas pipeline.

Overall, the length of the pipeline operated by PGN is equivalent to 80 percent of the total gas pipeline infrastructure network in Indonesia.

From the infrastructure, PGN can channel 1,505 MMscfd of natural gas to 196,221 customers, ranging from households, SMEs, to industrial customers, spread not only in Java but also in North Sumatra, Riau Islands, South Sumatra, Lampung, North Kalimantan, to Sorong in Papua. (Ant)