PGN updates
As predicted, state-owned oil & gas company PT Pertamina has demanded renegotiation with PGN due to major delay of South Sumatra West Java gas pipeline. Financial impact for Pertamina is huge because the company should service USD270 million loan to JBIC. In contrast to PGN management's explanation that the delay is three months, Pertamina claims the delay is actually nine months.
"The initial schedule for operation was June 2006, but now PGN says March 2007," Rony Gunawan, Pertamina executive said.
PGN rejected the demand for price negotiation but willing to pay compensation (fines & take/pay clause). Pertamina plans to supply 250 MMSCFD. Slightly lower compensation would go to ConocoPhillips which supplies 230 MMSCFD as no fines applied.
The biggest chunk of the compensation will be for PGN's unability to absorb minimum 80% of gas supply under the take/pay clause. Under the contract with gas suppliers, PGN should absorb at least 150 MMSCFD in the first year of SSWJ pipeline. So, 80% means 120 MMSCFD. PGN revised its plan that the first three months, the company could only absorb 30 MMSCFD.
I think PGN should explain in details all the compensations to Pertamina & ConocoPhillips, financially. PGN did explain the issue in analyst meeting early this week that the low absorption this year would be compensated with bigger gas take next year (make-up gas). But when asked whether PGN should pay, the management said yes, but in 2008.
Meanwhile, Bapepam has started insider trading investigation over PGN shares that led the 40% crash last week.
READ MORE!!!
"The initial schedule for operation was June 2006, but now PGN says March 2007," Rony Gunawan, Pertamina executive said.
PGN rejected the demand for price negotiation but willing to pay compensation (fines & take/pay clause). Pertamina plans to supply 250 MMSCFD. Slightly lower compensation would go to ConocoPhillips which supplies 230 MMSCFD as no fines applied.
The biggest chunk of the compensation will be for PGN's unability to absorb minimum 80% of gas supply under the take/pay clause. Under the contract with gas suppliers, PGN should absorb at least 150 MMSCFD in the first year of SSWJ pipeline. So, 80% means 120 MMSCFD. PGN revised its plan that the first three months, the company could only absorb 30 MMSCFD.
I think PGN should explain in details all the compensations to Pertamina & ConocoPhillips, financially. PGN did explain the issue in analyst meeting early this week that the low absorption this year would be compensated with bigger gas take next year (make-up gas). But when asked whether PGN should pay, the management said yes, but in 2008.
Meanwhile, Bapepam has started insider trading investigation over PGN shares that led the 40% crash last week.
READ MORE!!!
posted by yosef at 8:37 AM
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