CPC studying CBM in East Kalimantan, signs biofuel partnership with INKUD
Thursday, September 3 2009 - 01:12 AM WIB
CPC is conducting the feasibility study with its partners in the Sanga Sanga oil and gas production block, company Chairman Shih Yen-Shiang said on Wednesday, adding the feasibility study will take two years.
"The gas in Sanga Sanga is being depleted, so we want to see if we can extract the gas from the coal bed," Shih was quoted by Dow Jones as saying.
CPC's overseas investment arm, Overseas Petroleum and Investment Corp. (OPIC), holds a 16.7 percent stake in Sanga Sanga. Other partners include BP Group PLC, Italy's Eni SpA (E) and Universe Gas & Oil Company Inc., according to OPIC's annual report.
Shih was speaking on the sidelines of a signing ceremony for a memorandum of understanding (MOU) by CPC with INKUD, Indonesia's National Federation of Rural Cooperatives, on planting Jatropha Curcas, a source of biofuel.
Under the MOU, CPC and INKUD to plant 100,000 hectares of jatropha trees over the next five years in East Kalimantan, which will be able to produce 350,000 metric tons of jatropha oil and 2 million tons of carbon credits, CPC said in a statement.
Indonesia's government wants to encourage planting of jatropha trees on a total of 24 million hectares, said Shih. "That jatropha oil will supply Taiwan's needs but in the future, we can also sell it globally," he said.
The total planned investment for jatropha planting in Indonesia by CPC and INKUD is US$250 million, said Quentin Yao, head of CPC's joint venture business division.
The spending plan is part of CPC's 2010 budget and must be approved by the legislature, so CPC will start harvesting the jatropha oil in 2011 at the earliest, said Yao.
CPC and INKUD will each take a 45 percent stake in the venture, and CPC will find other partners for the remaining 10 percent share, Yao said.
With the investment in biodiesel, CPC is targeting the European and Chinese markets, said Yao. (*)