Mayhill to start building $2b refinery in Sumbawa

Mayhill to start building $2b refinery in Sumbawa

SINGAPORE (Dow Jones): Mayhill International Trading & Services Ltd., a UK-based company, will begin the construction of US$2 billion oil refinery and storage facilities early next year at Indonesia's Sumbawa Island, a senior company official said Tuesday.

Mayhill Vice Chairman Topek Martopu Sumarinda said the 150,000-barrel-a-day refinery is scheduled to be completed in 2005. Site preparations necessary before actual construction is to begin in June this year, Sumarinda added.

The company will also construct storage tanks at Sumbawa with a total capacity of 6 million barrels. The refinery and storage facilities will be operated by the London-based firm's unit Mayhill International Trading & Services Indonesia, or MITS Indo, he said.

The Sumbawa refinery is 100 percent owned by Mayhill, he added.

Sumarinda said Mayhill received a "sovereign guarantee" from the Indonesian government in late February regarding its plans to construct and operate the refinery.

"This means the project isn't subject to nationalization or to any political changes or issues that arise," he said.