Gas Negara Expects Fuel Sales to Rise as Much as 33%

By Leony Aurora

Dec. 23 (Bloomberg) -- PT Perusahaan Gas Negara, Indonesia's biggest natural gas distributor, expects fuel sales to rise as much as 33 percent next year as it increases supply to utilities.

The company may sell on average between 700 million cubic feet a day and 800 million cubic feet a day of gas in 2009, depending on economic conditions, President Director Hendi Prio Santoso said during a conference call with analysts and reporters today. That compares with as much as 600 million cubic feet a day this year.

Gas Negara expects utilities to account for as much as 40 percent of its sales next year, Santoso said. The Jakarta-based company signed three new contracts this year to supply 210 million cubic feet of gas a day to power plants operated by state utility PT Perusahaan Listrik Negara.

Increased sales to domestic utilities will more than offset declining demand from factories.

Indonesia's export growth may fall below 10 percent next year from an expected 12 percent this year as a global recession saps demand, Trade Minister Mari Pangestu said Dec. 8. Some industrial customers have requested Gas Negara to reduce their contracted supply, Santoso said.

``This small hiccup has been remedied by the surge of volume take up in the power sector,'' Santoso said.

To contact the reporter on this story: Leony Aurora in Jakarta at laurora@bloomberg.net.