Construction of two new oil refineries approved
Construction of two new oil refineries approved
JAKARTA (JP): The government, which recently licensed four oil
refineries with total investments of US$7.2 billion, has approved
applications for the construction of two other refineries at a
combined cost of around US$400 million.
State Minister of Investment Sanyoto Sastrowardoyo said
yesterday that one of the two refineries will be located in the
eastern part of the country and the other in the west.
Sanyoto, speaking at the fourth congress of the Indonesia
Financial Executives Association (IFEA) at the Shangri-La hotel
here, said that the refinery to be set up in the western part of
the country will export its products.
The two-day congress, which ended yesterday, presented
Minister of Finance Mar'ie Muhammad, Coordinating Minister for
Economy and Finance Saleh Afiff and the chairman of the Stock
Market Supervisory Board, Bacelius Ruru, as speakers besides
Sanyoto.
Sanyoto, who is also chairman of the Investment Coordinating
Board (BKPM), declined to elaborate on details of the investments
and the exact sites of the planned refineries.
But, an informed source of the state oil company Pertamina
told The Jakarta Post yesterday that one of the two refineries is
the Kasim refinery, planned to be built in Irian Jaya with a
daily processing capacity of 10,000 barrels.
The Kasim refinery will be constructed by PT Kinarti
Regulonuri in cooperation with Matrix Engineering Inc. of the
United States with an estimated investment of $75 million,
Pertamina said.
Pertamina said that the Kasim refinery is designed to process
domestic crude oil for distribution in the eastern provinces,
including Irian Jaya, Maluku and provinces in Sulawesi.
BKPM has recently approved four export-oriented oil
refineries, including two in East Java, to be constructed by PT
Buana Ganda Perkasa with an investment of $3.5 billion and PT
Asia Pacific Petroleum with an commitment of $1.09 billion. PT
Sabang Oil Refinery will construct a refinery in Sabang, Aceh,
with an investment of $1.58 billion and PT Indo Mudi Oil Corp.
another in Pare-Pare, South Sulawesi, at a cost of $1.03 billion.
Other projects
In addition to the refineries, Sanyoto said that BKPM has also
approved plans to establish a steel plant in East Kalimantan, two
power generation plants in Java, one giant loudspeaker
manufacturing plant in Java and 175 rubber shoe plants in various
places of the country.
He told the Post that the steel plant will be constructed by a
South Korean company, Kodeco Corporation, with an investment of
$1.2 billion.
He declined to elaborate on the two power projects.
However, according to a source at the state electricity
company PT PLN, who insisted on anonymity, the two power projects
are the Paiton II coal-fired generation plant with a capacity of
1,200 megawatts (MW) in East Java and a gas-fueled power plant in
Serpong, West Java, with a capacity of 400 MW.
The $2.1 billion Paiton II project will be constructed by a
consortium of Germany's Siemens AG, British Power Gen and the
Bimantara Group, while the $360 million Serpong plant will be
sponsored by a consortium of British Gas Plc. and PT Bakrie Power
Corp.
Sanyoto added that his office will also likely to approve
plans on five power projects and that 60 investors have submitted
letters of intent to establish the power projects.
He said the loudspeaker manufacturing plant will be set up by
Rachmat Gobel Corporation, an Indonesian-Japanese joint venture.
The minister said the investment applications thus far have
him feeling optimistic that foreign investment approvals will
likely reach US$22 billion this year.
As of Sept. 24, approvals on foreign investment commitments
had reached 318 projects valued at $19.92 billion this year, as
compared to 329 projects at a total value of $8.14 billion last
year, Sanyoto said.
He added that domestic investments approved by BKPM as of
Sept. 24 had reached 638 projects worth Rp 45.14 trillion, as
compared to 548 projects worth Rp 39.45 trillion approved last
year. (fhp)