Indonesia's PGN says no official approach by Pertamina on takeover plan

JAKARTA Thu Dec 12, 2013 5:11am EST

JAKARTA Dec 12 (Reuters) - Indonesian state oil firm Pertamina wants to buy the country's main natural gas distributor, state-owned PT Perusahaan Gas Negara (PGN) , but has made no official approach, a PGN spokesman said.

President Susilo Bambang Yudhoyono's administration has been considering such a deal over the past few weeks to give Pertamina greater control over the distribution of the country's natural gas. PGN controls 80 percent of the gas pipelines in Southeast Asia's largest economy.

"It is true that there is an intention of Pertamina to acquire PGN. But officially, we have not received any kind of letter or anything which mentions that," said PGN spokesman Ridha Ababil.

State-owned Enterprises Minister Dahlan Iskan told local newspaper Tempo recently that the government could make a decision on the acquisition sometime next year.

Some analysts have said a takeover by Pertamina won't benefit PGN, and have attributed the gas distributor's recent share price weakness to speculation about the acquisition. The shares fell as much as 13 percent since the start of November and are down 7 percent over that period as of Thursday's close.

Ababil said Pertamina would like to acquire PGN so it can distribute gas without paying a fee.

"There is an interest from Pertamina to control upstream to downstream gas activity. To do that, they need gas infrastructure," he said.

"The one that already has gas infrastructure is PGN, while their subsidiary Pertagas is dedicated to upstream."

Pertamina officials were not immediately available for comment. Last month, the state oil company said in a statement the proposed acquisition would help strengthen national energy security.

The Indonesian government owns 57 percent of PGN, in which U.S. fund managers such as Capital Group, Vanguard and Matthews International are also invested, as per their latest securities filings.

Indonesia consumes about 40 billion cubic metres of gas a year and demand is growing by at least 10 percent annually.

Natural gas accounts for about 20 percent of Indonesia's energy mix, while coal has a 50 percent share and oil about 30 percent. (Reporting by Ferges Jensen; Writing by Randy Fabi; Editing by Muralikumar Anantharaman)