Jakarta (IOGnews) - State gas distributor PT Perusahaan Gas Negara (PGN) has allocated Rp 3.4 trillion (USD 363.8 million) this year to acquire several gas blocks it needs to provide more gas for its receiving terminal in North Sumatra, a PGN director says.

“[PGN] has allocated Rp 3.4 trillion to buy new gas blocks, the entire amount of which will be taken from the company’s internal budget,” PGN president director Hendi Prio Santoso said Thursday after signing an MoU for a joint venture with state oil and gas company Pertamina.

PGN reportedly has plans to build a USD 1 billion Liquefied Natural Gas (LNG) receiving terminal in North Sumatra, which is expected to operate in 2012.

“Our spending is only for the starting budget. In fact if it needs more capital, the figure will be up to five times more, or Rp 15 trillion,” Hendi said, adding that in order to achieve gas supply stability the company would invest some of the funds it gained from the downstream sector to strengthen its upstream sector.

“Our main problem is we do not have enough gas to distribute. We only provide around 65 of our capacity. By purchasing new gas blocks we will not need to rely on gas producers,” he said.(JP)