Medco to form bioethanol JV with Brazilian firm

Publicly listed Energy firm PT Medco Energi Internasional Tbk. will form a joint venture with Brazilian biofuel company Dedini to set up a bioethanol plant in Marauke, Papua.

"The plant will have a production capacity of 30,000 barrels a day and will require an investment of $200 million," Medco's founder Arifin Panigoro told reporters on Tuesday.

He said the plant should start operating in 2011 if "everything goes as scheduled and we start construction this year."

Medco is awaiting approval from the government to acquire 1 million hectares of land where it can grow sugarcane, which will serve as the bioethanol plant's feedstock.

State owned oil and gas company PT Pertamina was in talks with Medco on a possible biofuel supply to the country's gas stations.

Pertamina expected to get 900,000 kiloliters of ethanol supply from Medco as raw material for the production of the so-called Biopremium biofuel by the state owned company, Pertamina's Fuel Division Head Djaelani Sutomo said on August 20. (*)