Pertamina sets aside $2.46b to rejuvenate aging fleet

State-owned oil and gas company Pertamina is setting aside US$2.46 billion to renew its aging tanker fleet that carries crude oil, gasoline and liquefied natural gas, The Jakarta Globe reported Saturday.

Pertamina is buying 19 new ships and it would be drawing upon the company?s own capital reserves so that there would be no need to take out loans, Muhammad Irfan, assistant manager of ship building support, said.

The fleet rejuvenation is part of the company?s long term plan to reduce the average age of the vessels it uses.

?Nearly 60 percent to 70 percent to Pertamina?s fleets is old and we are actively working to upgrade our fleet,? he said, adding a master plan of Pertamina?s shipping business unit has set 2012-16 for replacing the aging fleet.

The plan to update its fleet is part of the company?s aim to become a global shipper as well as a world-class energy company by 2024.

Irfan added that of the 19 ships, six would be time charters with a capacity of 17,500

LTDW (long ton dead weight) estimated to be worth $165 million.

The company will also need two more tankers to carry lube base oil with an estimated cost of $28 million, while an additional $21 million will be needed to finance the purchase of another tanker. It also said $62 million was being set aside for a tanker with a capacity of 85,000 LTDW

In addition, the state-owned company plans to buy three smaller tankers valued at $28 million, another general purpose tanker with a price tag of $29 million, and one more medium-range vessel at a cost of $38 million. Pertamina claims there is no problem financing these plans with the company recently announcing plans to raise $5 billion from selling dollar-denominated bonds this year, the third such sale in as many years. Pertamina raised $13 billion from selling medium- and long-term notes in 2011 and a further $2.5 billion in 2012. (*)