Indonesia, China sign deal on six energy projects worth $ 5b

(The Jakarta Post Via Thomson Dialog NewsEdge) from The Jakarta Post, October 30, 2006

The Indonesian government has signed an investment contract with the Chinese government on six energy projects worth up to US$5 billion.

As reported by Antara from Shanghai, the contract was signed by Indonesia Energy and Mineral Resources Minister Purnomo Yusgiantoro and China's Planning Committee and State Reform Minister Ma Kai, and was watched by President Susilo Bambang Yudhoyono and Senior Vice Prime Minister Huang Zu in Shanghai last Saturday during the Indonesia-China Energy Forum II.

Purnomo said the six projects included the establishment of a chemical factory for producing liquid coal in South Sulawesi worth $687 million, involving PT Sumber Gas Sakti Prima from Indonesia and Chenda Engineering Corporation of China and Sinchuan Chemical Industry Holding.

The two nations will also cooperate in enhancing coal energy plus other chemical research programs by establishing a plant in Kunming province, China, estimated to be worth between $300 million and $1 billion and involving PT Antarniaga Nusantara Indonesia, Yunan Chemical Industry Group and China National Chemical Engineering Group Corporation.

One project is the establishment of a steel factory and iron ore facility in Sukabumi, West Java, worth $300 million, involving PT Ciracap Sumber Prima and Yunan Geology and Mineral Resources.

A power plant, worth $170 million, capable of delivering two times 100 megawatts will also built in Jeneponto, South Sulawesi, involving PT Bosowa Energi and Chenda Energy Corporation of China.

Another power plant, estimated to worth $2.1 billion, will also be established in South Sumatera. It will be capable of delivering four times 600 megawatts of coal-powered electricity, and will involve PT Tambang Batu Bara Bukit Asam, the State Power Company, PT Indika Inti Energy and China Huadian Corporation.

Lastly, the contract includes plans to establish joint work worth $1.5 billion between the Energy and Resource Ministry and the China National Offshore Oil Corporation to explore crude oil beneath the Aru Island.

"Cooperation in the energy sector is something that is relatively new in the long history between Indonesia and China, but this is the area that will increase the geo-political and geo-economic relations between the two countries," President Yudhoyono said.

The president also said that he hoped that within a decade Indonesia could be the largest bio-energy provider in the world and that foreign investment from countries such as China could make this come true.

The president is in China to bolster economic cooperation between the two countries and is expected to return home on Tuesday.