Government approves $6b refinery projects<\/p>\n
JAKARTA (JP): The government has approved two oil refinery
\nprojects valued at US$6 billion to be built by a joint venture in
\nPare-Pare, South Sulawesi, and Batam.<\/p>\n
The refineries will be built by a joint venture of investors
\nfrom Saudi Arabia, China and Indonesia. The joint venture, PT
\nKilang Minyak Intan Nusantara (KMN), received approval for the
\nPare-Pare refinery last week from the Investment Coordinating
\nBoard (BKPM), while plans for the Batam refinery were approved by
\nthe Batam Authority Board, which issues investment permits for
\nthe island.<\/p>\n
Ibrahim Al-Oqab, president of the Saudi Arabia-based
\nInternational Business Company (IBC), said KMN also had received
\nPresident Abdurrahman Wahid's support for the projects during a
\nmeeting earlier this month.<\/p>\n
\"There is an opportunity to invest here in Indonesia, and so
\nwe have entered the country,\" Al-Oqab said during a media
\nconference.<\/p>\n
KMN expects to start construction on the refineries next year,
\nwith commercial production slated to begin in the fourth quarter
\nof 2004.<\/p>\n
The two refineries, valued at $3 billion each, will have a
\nproduction capacity of 300,000 barrels of oil per day, 90 percent
\nof which KMN plans to export.<\/p>\n
Al-Oqab said the crude oil for the refineries would be wholly
\nimported from the Middle East and the majority of the processed
\noil would be exported to China.<\/p>\n
The Pare-Pare refinery is expected to export $1 billion worth
\nof fuel per year, while the Batam refinery is expected to export
\n$3.63 billion worth of oil per year, KMN said.<\/p>\n
The refinery in Pare-Pare, Ibrahim said, will supply China and
\nother East Asian countries, including Japan, Korea and Taiwan.
\nThe refinery in Batam will supply markets like Singapore,
\nThailand, India and Bangladesh, he said.<\/p>\n
Indonesia's proximity to these markets, Ibrahim added, was one
\nof the reasons why investors chose the country for this project.<\/p>\n
Asked if the investors were fazed by Indonesia's security and
\npolitical instability, he said he felt Indonesia was safe.<\/p>\n
\"Seeing through my glasses, I see Indonesia as a good country
\nfor investment. I don't care what other glasses see,\" he said.<\/p>\n
Mappasulle, the president of local partner Intanjaya Agromegah
\nAbadi, said world economic development still depended on energy,
\nthus making this a prospective industry.<\/p>\n
\"Especially if we look at China with its fast-growing
\neconomy,\" he added.<\/p>\n
He said KMN would retain 10 percent of the refineries'
\nproduction for the domestic market.<\/p>\n
State oil and gas company Pertamina might purchase the oil
\nfrom KMN if necessary, he explained.<\/p>\n
KMN is 40-percent owned by IBC in partnership with another
\nSaudi Arabian firm, Al-Bandar International Group.<\/p>\n
Another 40 percent is owned by the China National Electrical
\nEquipment Corporation (CNEEC), Investment Pacific Inc. and Lau
\nSwee Seng.<\/p>\n
PT Intanjaya Agromegah Abadi owns the remaining 20 percent
\nstake. The local company is a joint venture with the American
\nfirm Inter Global Technologies, which has a 5 percent stake in
\nIntanjaya.<\/p>\n
The president of Inter Global, Michael Tomayko, said his
\ncompany planned more investments in the Indonesian oil industry
\nthat might reach several billions of US dollars.<\/p>\n
Inter Global, he added, also is interested in pipeline
\nprojects and agricultural projects, with total investments worth
\n$1.5 billion and $1 billion, respectively.<\/p>\n
\"I would say there will be another four to five billion
\ndollars (in projects) announced in the next 30 or 60 days,\" he
\nsaid. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-approves-6b-refinery-projects-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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