Humpuss to establish $330m methanol plant

Humpuss to establish $330m methanol plant

JAKARTA (JP): A subsidiary of Humpuss Group yesterday assigned
Lurgi Oil-Gas-Chemie Gmbh of Germany to construct a methanol
plant worth US$330 million in Bontang, East Kalimantan, with an
annual capacity of 660,000 tons.

The project will be the first private methanol plant and the
second producer of such a downstream chemical product in
Indonesia after the first one established by the state oil
company Pertamina in 1983.

Abdul Wahab, president of the Humpuss subsidiary, PT Kaltim
Methanol Industri (KMI), told reporters after signing the
contract agreement with Lurgi that the construction of the
methanol plant will begin later this year and will be completed
within 28 months.

Wahab said the plant is expected to start production at the
beginning of 1997.

The construction of the plant, originally planned by KMI in
cooperation with a state-owned fertilizer company, PT Pupuk
Kaltim, was delayed from its original schedule at the end of
1991, following the issuance of Presidential Decree No. 39/1991,
which prevents state-owned companies or joint ventures involving
state-owned companies from accruing large amounts of offshore
loans. Pupuk Kaltim then withdrew its participation in the
project.

KMI decided to resume the project by signing a memorandum of
understanding with IKB Deutsche Industriebank AG of Germany and
Nissho Iwai Corporation of Japan on its financing on Sept. 16,
1993.

Wahab said yesterday that 80 percent of the costs for the
project's construction will be financed by an offshore loan from
IKB Deutsche Industriebank AG and Nissho Iwai Corporation and the
remaining 20 percent by his company's equity.

He said the plant will be designed to produce 2,000 tons of
methanol per day, or a total of 660,000 tons per year, assuming
that there will be 330 working days a year.

Sixty percent of the plant's production will be exported. The
remaining 40 percent will be sold domestically.

Director General of Chemical Industries Sujata said the demand
for methanol in Indonesia is 460,000 tons per year, while the
supply from Pertamina is less than 330,000 tons. (02)