Sembulang set to become oil industry zone

Preparations are on to turn Sembulang area on Rempang Island, Batam area, into a special economic zone (SEZ) for strategic industries like oil and gas as well as power, the Bisnis Indonesia newspaper reported in its Tuesday edition.

The SEZ, which will be built on a 2,000 hectare land, is intended to provide facilities for three investors from Saudi Arabia, Malaysia and Japan, who want to build a power plant and oil gas refinery with an investment worth between US$1 billion to $4 billion.

According to the Batam’s investment coordinating agency BKPMD, all the three investors already made the feasiblity. Two companies already started construction work and they would be completed in between 2007-2009.

Malaysia’s PT Tanjung Jelita will build a gas transmission pipeline from South Sumatra to Sembulang with an investment of $873 million. It will work with Iran’s Iranian Offshore Engineering and Construction to build the pipeline.

Saudi Arabia’s Al Ain Industries Ltd. is planning to build a $1 billion oil refinery in that area . Meanwhile, Japan’s Global Utility Development Co. Ltd. will build 200-300 MW gas-fired power plant.(*)