Mitsui to handle $200 million Pertamina project financing deal

Mitsui & Co. has signed a project financing deal worth US$200 million with the state-run petroleum company Pertamina.

The Nihon Keizai Shimbun in its Sunday edition, as quoted by Dow Jones Newswire, reported that under the contract, five banks, including the Japan Bank for International Cooperation (JBIC), will provide necessary funding for the Indonesian firm's new oil project.

Mitsui will receive low-sulfur fuel oil from Pertamina and use its sales proceeds to repay the banks. It is one of the largest loan deals handled by Japanese companies for Indonesia since a major currency crisis erupted in East Asia in 1997.

The JBIC will lend $120 million, while UFJ Bank, Bank of Tokyo-Mitsubishi, France's Credit Lyonnais and ING of the Netherlands will provide $20 million each.

Pertamina will use the loan to fund a national project it will conduct in the western part of Java Island to produce unleaded gasoline.

Mitsui is to receive 20,000 to 31,000 barrels of low-sulfur fuel oil on a daily basis for just over three years for sale to thermal power plants in Japan, South Korea and elsewhere.

Major Japanese companies had refrained from handling major projects in Indonesia since the 1997 crisis. Some, however, have resumed dealings now that the country's economy has stabilized. (*)