Pertamina signs US$6billion synthetic diesel project

State oil and gas company Pertamina has signed a memorandum of understanding with Canadian firm Accelon Energy System Incorp that allows the state firm to be the offtaker of the synthetic diesel worth US$6 billion to be produced by the Canadian firm.

Pertamina?s president Widya Purnama said on Friday the synthetic diesel oil would be produced by a coal liquefaction plant to be built by the Canadian firm.

?The coal will come from East Kalimantan and the plant is expected to start operation in mid-2008 with an annual output of 28 million barrels,? Widya said, adding that the plant will need about 10 million tons of coal per year to produce the amount of diesel.

According to Widya, the diesel to be produced by the Canadian firm is equal to Euro 4 diesel in terms of quality.

Under the MOU signed on Thursday, Pertamina will act as the offtaker of the diesel over the period of 15 years. (Godang/dino)