Pertamina, Accelon to build $6b plant

Pertamina, Accelon to build $6b plant

Grace Nirang, Bloomberg/Jakarta

State oil and gas firm PT Pertamina and Canada's Accelon Energy
Systems Inc. agreed to build a US$6 billion plant that would turn
coal into diesel.

The companies signed an initial agreement on Nov. 23,
Pertamina President Director Widya Purnama told reporters here on
Friday. Accelon will finance the project and Pertamina will buy
the fuel produced at the plant to be built in Kalimantan, he
said.

Indonesia, the second-smallest producer in the Organization of
Petroleum Exporting Countries, is seeking to reduce fuel imports
to cut costs and narrow its budget deficit. The country buys
about one-third of its fuel requirements from overseas.

"We will sign a final agreement four months from now," Widya
said. The plant will convert 10 million metric tons of coal into
28 million barrels of diesel a year, he said.

The plant's output will cover a third of Indonesia's diesel
imports, he said. Pertamina will buy the diesel from Accelon for
15 years. It may take three years to build the plant, which has
Merrill Lynch & Co. as its financial adviser.

Indonesia imports about 11 million barrels of crude oil a
month, at a cost of as much as $1.6 billion.

Pertamina is planning to buy more oil pumped within
Indonesia's borders to supply domestic refineries and reduce the
country's oil-import bill.

On Thursday, Pertamina said it agreed to buy 250,000 barrels
of crude oil from BP Plc every three months starting in December.
Pertamina will buy Arjuna crude oil, which is pumped in West
Java, Nina Sulistyowati, Pertamina's assistant manager for oil
procurement said.