PT Medco to revamp Bunyu methanol plant
JAKARTA (JP): PT Medco Methanol Bunyu, a subsidiary of the Medco Group, will spend US$20 million to revamp its 14-year-old methanol plant on Bunyu island, East Kalimantan, to make it competitive for another 20 years, the company says.
Company president Robby J. Rompis told The Jakarta Post yesterday that the revamping plan would bring the plant to its full designed capacity of 330,000 tons a year.
"Refurbishment is scheduled to start next year and will be completed in one year," Rompis said.
Medco took over the management and operation of the country's first methanol plant from the owner, state-owned oil and gas company Pertamina, in April this year in a joint-operation contract.
In the contract, Medco will operate the plant for 20 years while Pertamina will receive a fixed amount of fees and a share of the plant's revenue.
The plant, which was built in 1983, had production problems since it started commercial production in 1986 due to a natural gas supply shortage.
Under Pertamina's management, the plant had only produced 130,000 tons a year.
Medco has supplied natural gas to the methanol plant from its gas field on Tarakan island, located 35 kilometers southwest of Bunyu.
Robby said Medco's gas field on Tarakan would be able to supply the plant with natural gas for 20 years.
He said the company had spent about $30 million to develop infrastructure to supply the gas, including the construction of pipelines connecting Tarakan and Bunyu.
"Since we started operating the field in April, the plant has been producing between 930 tons and 950 tons a day or annualized rates of between 300,000 and 320,000 tons," Rompis said.
According to Rompis, the distribution of Bunyu's methanol was formerly monopolized by Humpuss Trading, a subsidiary of the Humpuss Group, owned by President Soeharto's youngest son Hutomo Mandala Putra.
He said Medco had stopped Humpuss' monopoly and allowed all companies to buy methanol from Bunyu.
"We sell the methanol on the spot. Any company wanting to buy methanol is welcomed at the plant," Rompis said, adding that Medco had not made any long-term purchase contract with buyers.
According to Rompis, there are six companies acting as distributors for Medco's methanol, including Humpuss Trading, Aifta Dirga Jasa and Multi Impressa.
Humpuss is developing the country's second methanol plant in Bontang, East Kalimantan, with a designed capacity of 660,000 tons a year. The plant is scheduled to start commercial production by the end of the year.
Methanol is used for making formaldehyde, solvents, acetic acid and glue for plywood. (jsk)