Ab!tract*+ Law No. 22 Year 2001 concerning Oil and Gas states explicitly the
priority for using more natural gas in domestic maret. Once the master plan for
national gas transmission and distri!ution issued !y the go"ernment# there will !e a
great demand to de"elop natural gas infrastructure pro$ects# including pipeline
transmission and distri!ution as well as LNG recei"ing terminal and gas storage
facilities in %ndonesia. &ue to the characteristic of large in"estment costs# long
construction period and lac experience in !uilding such ind of huge gas pro$ects#
howe"er# there will !e critical challenges in pro$ect de"elopment and how to finance the
pro$ects.
'his paper presents our experiences# as a go"ernment agency# in financing
natural gas pro$ect# especially that of pipeline transmission and distri!ution. 'he paper
descri!es issues of go"ernment de"elopment !udget# !ilateral(multilateral loans in gas
de"elopment pro$ects# lesson we learn from the experiences# and financing option for the
future.
*
Presented for INDOGAS 2005, the 2
nd
International Conference & Exhibition, 17-20 January
2005, Jakarta Convention Center, Indonesia.