Private firm to build refinery in E. Java

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)