Joint venture to build Pare-Pare refinery next year
Friday, October 6 2000 - 04:00 AM WIB
PT Kilang Minyak Nusantara, a joint venture of Arabian, Chinese and Indonesian companies, said it would start the construction of the US$3 billion refinery in Pare-Pare, South Sulawesi next year.
"The construction will start in less than one year," Ibrahim Al Oqab, president of Saudi Arabia-based International Business Company (IBC), a member of the joint venture, told Petromindo.Com and The Jakarta Post.
IBC together with Al-Banader International Group, also of Saudi Arabia, owns 40 percent of Kilang Minyak Nusantara in the partnership with a consortium of Chinese companies China National Electrical Equipment Corporation (CNEEC), Investment Pacific Inc. and Law Swee Seng, which owns 40 percent of the shares, and a consortium of Indonesian company PT Intanjaya Agromegah Abadi and American company Inter Global Technologies, which possess 20 percent of the shares.
Kilang Minyak Nusantara planned to build a giant refinery in Bacukiki with the processing capacity of 300,000 barrels of oil per day.
The company projected the construction of the refinery was expected to complete in 48 months and the refinery was expected to come on stream in the fourth quarter of 2004 with products including liquefied petroleum gas (LPG), petrochemical naphtha, gasoline, jet fuel/gasoline, diesel fuel, asphalt, and sulfur.
Intanjaya's president Mappasulle HS said Kilang Minyak Nusantara was in the process of acquiring 1,000 hectares of land at the Pare-Pare Growth Zone.
The project has gained supports from President Abdurrahman Wahid and secured permit from the Pare-Pare Growth Zone authorities, Mapasulle said.
The company is seeking to a "recommendation" from Minister of Energy and Mineral Resources, which is necessary for the company to obtain final license from the Investment Coordinating Board (BKPM), Mapasulle said.
"We don't need license from Pertamina for the project, since we shall not take crude oil from the state oil and gas company and most of the refinery's products will be sold in the export markets," Mapasulle said.
According Mapasulle, the crude supplies for the refinery will be guaranteed by IBC and Al-Banader, while the Chinese partners will become the off-taker of the refinery's products.
Mapasulle said American investment fund Alfax International Fund was interested in the project and ready to provide financing.
He also said Kilang Minyak Nusantara also planned to build another refinery on the Rempang Island in Riau with the same processing capacity.
He said the company expected to begin the construction of the Rempang refinery about six months after the start of the construction of the Pare-Pare refinery.
Ibrahim said the refinery project would become the first investment of Al-Banader and IBC in Indonesia.
The current economic and political turmoil in the country did not discourage Al-Banader and IBC from investing in Indonesia because they believe the country will pass through all the crisis and regain economic and political stability in two years, Ibrahim said.
"We want to support in Indonesia in recovering from the economic crisis. But, our investment plan is not purely driven by the wish to help.
"The investment plan is also based on a consideration that Indonesia will soon recover from the economic crisis as other countries in the region and it will become a strong government," Ibrahim said. (Alex)