Humpuss control on Bunyu methanol ends

JAKARTA (JP): State-owned oil and gas company Pertamina would end the monopoly given to Humpuss Trading in selling the methanol produced at its plant in Bunyu island, East Kalimantan, the company said yesterday.

Company president Feisal Abda'oe said Pertamina and its future partner to operate the country's sole methanol plant, PT Medco Energy Corp., had yet to choose the contractors to distribute the methanol.

"One thing is certain that the methanol will be distributed by more than one company. It is not because Humpuss Trading is no good, but because monopoly is no longer in trend, " Feisal said.

Medco vice president Robby J. Rompis earlier said the firm looked forward to having more than one distributor.

He said the distributors would be selected after both companies signed joint-operation (KSO) arrangements for the methanol plant.

Humpuss trading has acted as the sole distributor of methanol produced in Bunyu for several years. All the methanol was sold in the country.

Feisal admitted that Pertamina had negotiated with Medco on a joint-operation arrangement.

"All the principles (of the joint operation) have been agreed. We are only waiting to sign the agreement," he said.

He refused to reveal the contents of the agreement.

Robby said Medco would operate and manage the plant for 20 years and, in return, give Pertamina a certain fixed fee and part of the revenue.

The methanol plant, which was built in 1983, faced difficulties in producing methanol over the past ten years owing to the lack of natural gas supplied to the island.

The plant can only produce 130,000 tons of methanol a year out of its designed capacity of 330,000 tons.

Medco and Pertamina signed a memorandum of understanding several years ago to bring the plant to full capacity by supplying it with gas from Medco's gas field in Tarakan island, some 33 kilometers southwest of Bunyu.

Robby said the field was able to supply the plant with 30 million cubic feet of gas a day for 20 years. (jsk)