Kaltim Methanol secures market for its exports
Kaltim Methanol secures market for its exports
JAKARTA (JP): PT Kaltim Methanol Industri, wholly-owned by the
Humpuss Group, has secured an export market through a long-term
off-take agreement with Nissho Iwai Co. of Japan, the company's
president Abdul Wahab said yesterday.
Wahab said that Nissho Iwai, which arranged the offshore loans
of some US$250 million for Kaltim Methanol, agreed to purchase 60
percent of the company's total output.
"We now have a captive export market for our products. So it
should be good news for shareholders and lenders," Wahab said
after signing an agreement with state-owned PT Pupuk Kalimantan
Timur, which will supply Kaltim Methanol with 100 skilled
laborers.
Wahab said that Kaltim Methanol's plant in Bontang, East
Kalimantan, has an annual capacity of 660,000 tons of methanol
and will start commercial production in December next year.
"We expect that by that time methanol prices in the region
will rise to some $200 per ton from the current level of $170 a
ton," Wahab said, adding that methanol sold for $500 a ton in
1994.
Demand
He said that demand for methanol in the Asia-Pacific region is
expected to rise while supply is expected to remain stable. He
added that there are only a few suppliers of methanol in the
region, including Malaysia, New Zealand and Indonesia.
He said methanol demand in the region will remain high, citing
that Japan alone needs two million tons per annum. Most of
Japan's methanol needs are met by firms in the Middle East.
Indonesia imports some 150,000 tons of methanol per annum. The
country's only methanol plant, operated by state-owned oil and
gas firm Pertamina, is run below capacity while domestic demand
stands at some 400,000 tons per annum.
Pertamina's methanol plant on Bunyu Island, also in East
Kalimantan, has a production capacity of 330,000 tons per year.
It runs below capacity because of its out-of-date machinery and
lack of gas supply, the raw material for methanol production. It
plans to build a gas pipeline network from Kalimantan to supply
it with enough gas.
Meanwhile, natural gas for Kaltim Methanol will come from the
nearby gas fields of Pertamina, Total Indonesie, Unocal and Vico.
It is forecasted that the domestic demand for methanol will
increase an average of 9 percent per annum. By the year 2,000,
Indonesia will need between 650,000 tons and 700,000 tons of
methanol per annum.
Methanol is used as a solvent, anti-freeze, refrigerant and
chemical intermediate and is a major component for the production
of plywood glue. One-third of the world's methanol consumption is
for the production of formaldehyde, the major use of which is to
produce phenol, urea, melamine resins and plastics. (rid)