PPRC vows to build plant at Pare-Pare

JAKARTA (JP): Pare Pare Refining Corporation (PPRC) reconfirmed on Tuesday its plan to start developing a US$4.6 billion refinery next year in Pare-Pare, South Sulawesi.

The Singapore-based company said that political and economic turmoil had not discouraged it from realizing the plan.

"PPRC is maintaining continued confidence in the economic recovery of Indonesia," the company said in a statement.

It said it would start the construction of the first phase of the refinery project by April next year at the latest with total investment of $1.8 billion.

It will start construction of the second phase of the project, with total investment of $2.8 billion, from six months to eight months later.

The company did not clarify the kinds of facilities which will be built in each phase, but it said the refinery would have processing capacity of 280,000 barrels per day of crude oil with output mostly for export.

The refinery will be built in the village of Pinrang, about 115 kilometers north of the provincial town of Ujungpandang.

It will be operated by the company's wholly owned subsidiary PT Kilang Pare-Pare Nusantara.

Although most of the output will be sold on the export market, the company also plans to sell its products on the domestic market once the market is liberalized, it said.

State oil and gas company Pertamina still holds a monopoly on the production and distribution of fuel on the domestic market, but Indonesia and other countries grouped in the Association of Southeast Asian Nations (ASEAN) have decided to liberalize the oil and gas downstream sector by 2003.

Company chief executive officer Stephen Chong Hock Wen said it completed all preparations for the refinery project.

The company said it favored American construction firm Bechtel International Incorporated to become the main contractor for the project.

"Bechtel remains as PPRC's most favored contractor as its experience and good performance in Indonesia put the company ahead of others for selection."

It announced it signed a memorandum of understanding with Stork NV which allows the latter to head the former's task force to monitor the progress of the refinery project.

The company said it faced no difficulties in appropriating land for the project because the local people realized the benefits of the project to them.

"Local residents will be given priority for job opportunities with the refinery," the company said.

Another foreign investor, PT Hemoco Selayar International Oil Refinery, is developing a $2.4 billion refinery project on Selayar Island in South Sulawesi.

The company is 60 percent owned by Kuwaiti firm Hemoco Kuwait General Trading and Contracting Co. and the remainder by PT Kilang Minyak Bumi. (jsk)