Private firm to build refinery in E. Java

JAKARTA (JP): Privately owned PT Asia Pacific Petroleum Refinery Indonesia (APPRI), part of the Nusamba Group, announced here yesterday that construction of its refinery in Situbondon, East Java, would begin on Dec. 2.

APPRI said in a statement that the refinery project, which is to have a capacity of 300,000 barrels per day (bpd), would cost an estimated US$3.2 billion.

"The engineering procurement construction (EPC) contract, valued at $2.3 billion, has been awarded to the consortium of Stone & Webster Engineering Corporations of the U.S. and Daelim Engineering Co. Ltd. of Korea on a lump-sum turnkey contract basis," it said.

The refinery is configured to produce 160,000 bpd of diesel, 20,000 bpd naphtha, 60,000 bpd of gasoline and other petrochemical feed stocks.

More than half of the output will be sold in Indonesia, the statement said.

The consortium will have responsibility for the plant's conceptual design, selection of production process, basic and detailed design, procurement of equipment and materials and the construction, it said.

APPRI added that the consortium had commenced the basic engineering phase of the work, with the commercial operation set to begin in September 2001.

"This will be the first privately owned refinery."

The financing structure for the project would reflect APPRI's long-term supply contracts and the stable cash flow expected once operation began, the company said.

APPRI, with the assistance of Bankers Trust Company as the financial advisor to the project, is negotiating with export credit agencies in the U.S., Canada, Korea and Japan for a substantial amount of credit facilities.

The company has also engaged in negotiations with Kuwait Petroleum Corporation for long-term crude supply, a Japan-based trading company for commercial loans and product off-take and an international oil refining company for the operation and maintenance of the plant, it said. (icn)