S&P: No impact on Perusahaan Gas ratings

Standard & Poor's said its B+ rating and positive outlook on PT Perusahaan Gas Negara Tbk are not affected by a delay in the completion of a gas pipeline project from South Sumatera to West Java at this stage.

As a result, the project's two phases are expected to be operational in March 2007 and July 2007 instead of December 2006 as previously expected, S&P said. This delay is not expected to have a material effect on expected cash flows arising from the completion of these new pipelines, if they become operational as currently planned, the agency said. Nevertheless, if there is a further delay to these key gas transmission lines, the agency said, the outlook or the rating could come under downward pressure, specifically as the company is likely to increase its debt for funding capacity expansions.

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