INCO to build nickel factory in Bahodopi, C Sulawesi

Antara News, Fri, June 17 2011 

Palu, C.Sulawesi (ANTARA News) - PT Inco (Tbk) will realize its commitment to build a nickel processing plant in Bahodopi, Morowali district, Central Sulawesi province, before the end of June 2011, according to a clause in the work contract signed by the Indonesian government and PT Inco Canada in 1968.

"God willing, the groundbreaking ceremony to build the nickel refinery in Bahodopi will be held on June 22, 2011," a PT Inco official, Iskandar Siregar, said here Friday.

He refused to elaborate about the project but the Head of Bahodopi and Pomala`a Project, PT Inco, Kuyung Andrawina said the project`s cost was estimated at US$500 million.

According to Iskandar, the groundbreaking ceremony will be conducted by the Governor of Central Sulawesi Longki Djanggola, Morowali District Chief Anwar Hafid and the President Commissioner of Valeinco, the Brazilian company that controls the shares of PT. Inco, Peter Poppinga, as well as the CEO of PT Inco Tony Wenas.

On the occasion, PT Inco will also sign a memorandum of understanding with Bao Steel and PCI - two companies from China that will become partners to Inco in building the nickel factory.

The construction of the nickel plant in Bahodopi is also an investment strategy of the company to achieve an annual production of 90,000 metric tons compared with an average of 73,000 metric tons achieved in the last five years from the refinery in Sorowako, South Sulawesi province.

In connection with the visit of the Chairman of Valeinco Peter Poppinga to Morowali, Inco will also symbolically hand over the products development and the social activities which were funded with Inco`s social responsibility program that most of them are already enjoyed by the people of Central Sulawesi.

Those products include diesel engine power plant with a capacity of 1 mega watt, a unit of mini-hydro power plat, a health center building and its equipment, ten motorcycles for the health center as well as food packages to the local people living in the vicinity of the project site.

Editor: Jafar M Sidik

WIKA secures $16.9 million power plant project in Timor Leste

The Jakarta Post, Jakarta | Tue, 02/08/2011

Publicly listed constructor PT Wijaya Karya (WIKA) said Monday it had secured a US$16.9 million power plant project in Timor Leste.

WIKA president director Bintang Perbowo said the power plant, with an anticipated capacity of between 50 and 100 megawatts, will be executed by WIKA subsidiary, PT WIKA Insan Pertiwi.

“This project is expected to be completed on Feb. 20, “ Bintang said Tuesday as quoted by kontan.co.id.

The firm, along with PT Mirlindo Padu Kencana, also plans to build a 50 MW diesel power plant in Pesanggaran, Bali, worth Rp 550 billion (US$ 61 million), he said.

Pertamina planning to export diesel oil

Jakarta (ANTARA News) - State-owned oil and gas company PT Pertamina plans to export diesel oil this year following a decline in domestic demand for this type of oil, the company`s chief said. 

Pertamina President Director Ari Soemarno said here on Friday the company was making efforts to get overseas buyers for its diesel oil. 

"Domestic demand for diesel oil, especially from state electricity company PLN, has dropped so that part of our diesel oil output will be exported," he said. 

PLN had reduced purchases of diesel oil for its power plants and switched to gas, Sumarno said, adding that in 2008 PLN had bought a total of 11.4 million kiloliters of fuel oil, consisting of diesel oil and residue oil. 

But in 2009, PLN`s need for fuel oils was expected to drop to 7.9 million kiloliters, about 70 percent of which would be diesel oil and the remaining 30 percent residue oil. 

Sumarno further said PLN had been replacing diesel oil with residue oil, causing a decline in its power plant`s need for diesel oil. 

He said Pertamina had also postponed the execution of a plan to import 1.8 million barrels of diesel oil from Kuwait due to the drop in domestic diesel oil consumption. 

Earlier, the government had asked PLN to diversify its energy resources and optimize the use of gas, replacing diesel oil with residue oil and increase the use of coal and biofuels, according to J Purnomo, the energy and mineral resources ministry`s director general for electricity and energy utilization at a hearing with the House of Representatives (DPR)`s Commission VII (energy affairs) here Thursday.

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Java, Bali facing more blackouts

Ika Krismantari and Yuli Tri Suwarni, The Jakarta Post, Jakarta-Bandung

Electricity supply in Java and parts of Bali is at a critical balance as the country's biggest coal-powered generator, located in Central Java, burned through the last of its coal Friday night, with continued high seas hampering delivery of more coal.

A spokesman for state power firm PT PLN, Ario Subijoko, said Friday high seas were preventing ships carrying coal from docking near the Tanjung Jati plant in Jepara, further jeopardizing electricity supplies in Java and parts of Bali already suffering from rotating blackouts.

He said if coal ships were still unable to dock in Jepara by Saturday, PLN would attempt to transport by truck coal from ships now docked at a port in Semarang, the capital of Central Java province.

"However, it will be difficult as the loading capacity of each truck is only 20 tons," Ario.

The 1,320-megawatt Tanjung Jati power plant requires a coal supply of 3,000 tons each day.

The trip between Semarang and the plant takes about 60 to 90 minutes, if traffic is not bad.

Ario said if it proved impossible to transport the coal overland, the Tanjung Jati plant would have to shut down. However, he refused to say how much of a power supply deficit Java and Bali would suffer in this event.

He reported PLN was able to reverse a 300 megawatt deficit in power supply for Java and parts of Bali to a surplus of 230 megawatts after successfully switching some of its power generators to diesel fuel from coal.

The power surplus, he said, was sustainable at least through Sunday as factories and offices shut down their operations for the weekend.

Fabi Tumiwa, director of the Institute for Essential Services Reform, said if PLN failed to secure a coal supply, Java and Bali would suffer a power deficit of 600 to 1,000 megawatts, as the coal stocks of the other power supply providers such as the Cilacap and Paiton power plants were also depleting.

"For this weekend, the lower peak loads will help us, so there will be no blackouts until Sunday," Ari said, while warning of a critical condition for Java and Bali starting Monday.

Speaking to reporters on Friday, State Minister for Research and Technology Kusmayanto Kadiman said the country immediately needed to begin work on a nuclear power plant, to end its dependency on diesel and coal, as demanded by a 2007 law on government planning.

He said of 16 locations surveyed by the ministry's office, six were found to ideal for a nuclear plant, all of them along the coast of Java Island.

"Of the six, the Muria Peninsula has the highest stability rate for the operation of a nuclear power plant. Nevertheless, we see some opposition from residents there," he said.

Kusmayanto said investors were already interested in the nuclear plant project.

In response, PLN commissioner Al Hilal Hamdi said more research and liability studies were needed before beginning work on a nuclear plant, to ensure public safety.

"Seismic activity is something that needs to be accounted for within the study .... Maybe it is better to put (the plant) far from human habitations, far from Java. Batam island could be an ideal place," he said

Earlier, the National Nuclear Power Agency said the blueprint for a plant in Muria with a 7,000 megawatt took into account the possibility of seismic activity.

PLN short $2.78b to build 35 plants

Ika Krismantari, The Jakarta Post, Jakarta

State electricity company PLN revealed Thursday it was facing difficulties in financing a 10,000-megawatt (MW) coal-fired power plant project after Chinese lenders showed reluctance.

According to copies of documents obtained by The Jakarta Post, PLN is US$2.78 billion short of the $4.8 billion it needs to finance the project which involves 35 plants.

So far, PLN has launched four tenders for 13 plants, all won by Chinese contractors.

However, no more than three plants have secured all the financing required.

Commitments so far include $464 million in rupiah-denominated loans from a consortium of local banks and $853 million in dollar-denominated loans from Barclays in the UK and the Bank of China.

The three coal-fired plants are the 600-MW Labuan plant in Banten, 900-MW Indramayu plant in West Java and 600-MW Rembang plant in Central Java.

The agreements governing the project make PLN responsible for only 15 percent of total financing needed, while contractors must bear the remaining 85 percent by finding third parties to provide the loans.

All of the tender winners expect their financing to come from Chinese lenders, particularly the Bank of China.

However, demands from Chinese lender that the Indonesian government fully guarantee the project stalled negotiations.

Even after the government agreed to the guarantee, the negotiations have drifted without a clear deadline as both government and lenders differ on interest rates.

In turn, the government demands PLN invite bids from alternative lenders so as to meet the target of completing the project by year-end 2009.

"We have to hold tenders to find other banks, as the target of having Chinese lenders as the sole lender to support all of the projects can not be fully fulfilled," said head of the government's power-sector development program, Yogo Pratomo, during a hearing with the members of the House of Representatives Commission VII.

Yogo said the government aimed to have all funding lined up by the end of first semester 2008.

On the basis of project's progress so far, Yogo estimated that no more than six power plants -- a total capacity of 1,950 MW -- would be able to meet the initial target of starting operations in 2009.

As part of the 10,000-MW program, the government wants to have 10 new coal-fired plants with a total capacity of 6,900 MW, in Java, and 25 more with a total capacity of 3,100 MW outside Java, by 2009.

The aim of the program is to reduce dependency on the oil-based fuels currently burned by some 70 percent of PLN power plants.

PLN president director Eddie Widiono said that PLN fuel consumption in 2008 was expected to increase to 10.6 million kiloliters this year, up from last year's 10.2 million, to meet the 2008 national electricity growth target of 5 percent.

Govt, PLN to hold tender for four power plants

Ika Krismantari, The Jakarta Post, Jakarta

The government and state electricity company PT PLN will later this month invite bids for the financing of the company's four coal-fired power plants.

The head of the government's power-sector development program, Yogo Pratomo, said Thursday that the tender aimed to seek loans valued up to US$2 billion, or about 85 percent of the total funds needed to build the projects.

The development of the four power plants is part of the government's ambitious crash-program to build coal-fired power plants able to generate 10,000 megawatts (MW) by 2009.

The four are the 600 MW Pacitan plant in East Java, the 900 MW Pelabuhan Ratu plan in West Java, the 900 MW Teluk Naga plant in Banten and the 600 MW Tanjung Awar-awar plant in East Java.

Yogo said that the tender was opened to both domestic and foreign lenders, adding that he had sent 20 invitations to to local and overseas banks.

The tender will be the second after the first one last year, when four power plant projects were put on offer. The four are the 600 MW Labuan plant in Banten, the 900 MW Indramayu plant in West Java, the 600 MW Rembang plant in Central Java and the 600 MW Paiton Baru plant.

For the first tendering process, Yogo said PLN had managed to secure financing or loans of up to $1 billion for Rembang and Indramayu plants from both local and foreign banks.

PLN has secured dollar-denominated loans from the Bank of China and the U.S. Berkeley Bank and rupiah-denominated loans from Bank Mandiri and Bank Central Asia.

The government is still in the negotiation process with Chinese banks for Paiton and Labuan, Yogo added.

Under this crash-program, the government instead of PLN will decide the tender process and its winners, in particular because of the government's decision to provide a guarantee for the power plant projects.

Normally, no tenders would be held for the financing of power plants as they fall under the responsibility of the contractors, while PLN has only to bear 15 percent of the required funds.

Under the government's crash program, 10 coal-fired power plants with a total capacity of 6,900 MW will be built in Java, while 25 with a total capacity of 3,100 MW will be built outside Java.

The program aims to provide an additional 10,000 MW of power to the country by 2009, to push to supplies to around 39,000 MW.

PLN is turning to non oil-based fuels to generate power, including coal, amid the sky-rocketing price of oil on the global market.

At present, over 70 percent of PLN's power plants are fired by oil-based fuels.

PLN may spend $1.5b for power-for-all project

The Jakarta Post, Jakarta

State-owned electricity firm PT Perusahaan Listrik Negara (PLN) plans to invest up to US$1.5 billion this year to finance a project aimed at providing electricity to every citizen nationwide by 2020, a company executive said.

The project would include the construction of new power plans and the development of 26,000 kilometers of transmission cables and networking facilities in Sumatra and Java.

PLN president director Eddie Widiono said Monday the company would invest up to 25 percent of the $6 billion needed to realize the project, while the other 75 percent would come from other parties, including the private sector.

"We will also ask the government and city administrations to provide funds for the project so that people across the country can have access to electricity," said Eddie.

Currently, about 44 percent of the country's total population of more than 220 million lives without electricity, mostly those who reside in remote areas.

To solve this matter, PLN said it has intensified efforts to boost power supplies in the country, including by constructing new power plants that would provide an additional 10,000 megawatts power supply by the end of 2009.

It is building 10 coal-fired power plants with a total capacity of 6,900 megawatts in Java and 25 power plants outside Java with a total capacity of 3,100 megawatts.

The country now produces a total of 29,000 megawatts.

Eddie said PLN will spend up to Rp 139 trillion (US$14.78 billion) for the company's operations budget this year.

From that amount, he said 60 percent will be used for fuels which will fire around 78 percent of its power plants.

PLN said it planned to save Rp 1.7 trillion on fuel expenditure next year by reducing the use of high speed diesel (HSD) and switching to the cheaper medium fuel oil (MFO).

Eddie also said PLN expected to gain Rp 149 trillion revenue from the company's operations in 2008, mainly from electricity usage and the government's subsidy.

PLN said it was upbeat about doubling its net profit of Rp 2 trillion this year from last year -- the first profit in the last eight years.

The company said at the end of last year it expected to book a net profit of Rp 1 trillion.

PLN currently has a Rp 16 trillion debt to state-owned oil and gas company PT Pertamina.

The payment method was being discussed with the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) and the Finance Ministry, Eddie said. (adt)

PLN opening tender for supply of high-speed diesel oil

Jakarta (ANTARA News) - State-owned electricity company PLN is opening another tender for the supply of one million kiloliters of high-speed diesel (HSD) oil per annum for the 2008-2010 period.

PLN needs the HSD oil to operate power generating plants in Belawan (N Sumatra), Grati (East Java), Tanjung Batu (East Kalimantan) and Pontianak (West Kalimantan), the company`s power generation and primary energy director, Ali Herman Ibrahim, said here Wednesday.

"The tender`s winner will have the opportunity to be assigned to supply diesel oil for two more years (after 2010)," Ali Herman said.

He said the tender winner was expected to sign a contract with PLN by April next year, adding that interested parties could obtain auction forms between December 27, 2007 and January 9, 2008.

Companies interested in taking part in the tender would be required to guarantee their ability to supply 100,000 to one million kiloliters of HSD per annum from refineries either at home or abroad.

So far, PLN`s need for diesel oil was being met by only one company, namely state-owned oil company Pertamina.

PLN needs some nine million kiloliters of HSD oil and marine fuel oil (MFO) every year.

PLN held a similar tender late last year. A number of companies then expressed their interest such as PT Aneka Kimia Raya, PT Elnusa Petrofin (a subsidiary of Shell), PT Krida Petra Graha (a subsidiary of PT Petronas Wiraniaga Usaha) and PT Sigma Bangun Persada (a subsidiary of Gulf).

The location of PLN`s power generating plants at the time were among others Grati, Gresik Muara Karang, Muara Tawar and Tanjung Priok.

But PLN had up to now not yet named the winner of last year`s tender.

PLN to turn more to gas, coal next year

Ika Krismantari, The Jakarta Post, Jakarta

State-owned electricity firm PT PLN plans to cut the 2008 consumption of oil-based fuels by its power plants by 22 percent to seven million kiloliters (kl), down from this year's estimate of 9 million kl, as part of its efforts to switch to gas and coal.

President commissioner Alhilal Hamdi told The Jakarta Post recently that the firm hoped to cut its oil consumption as a number of new coal and gas-fired power plants came on line from the start of next year.

This year alone, the company has targeted to cut its fuel costs by Rp 9 trillion (US$957 million) to Rp 42 trillion from last year's Rp 51 trillion with the opening of three new coal and gas-fired power plants.

"We will also cut fuel expenditure by starting to switch to marine fuel oil, which is cheaper to replace than the high speed diesel (HSD) we used to use," PLN president director Eddie Widiono said.

Currently, 24 percent of PLN's power plants are fired by oil-based fuels.

The switch to other alternative fuels is expected to boost the company's profits this year.

PLN has been in the red for the past eight years.

"That's why we have partially switched from oil to coal, which is much cheaper," Alhilal said, adding that PLN's coal purchases would increase to Rp 8 trillion this year from Rp 6.4 trillion last year.

If the trend continues, lower production costs mean PLN is expected to post a Rp 3.8 trillion (US$422 million) net profit this year, Alhilal said.

The company's losses dropped by 58 percent in the fist six months of this year to Rp 967 billion (US$100 million) in the first half of this year, down from Rp 2.26 trillion in the same period last year.

The operation of new coal-fired power plants helped PLN to considerably reduce its losses to Rp 1.08 trillion in 2006, down from Rp 4.92 trillion in 2005.

Under the so-called "crash program", PLN plans to build a number of coal-fired power plants to provide an additional power supply of 10,000 megawatts by the end of 2009.

The operation of more coal-fired power plants is expected to further cut the company's operation costs in coming years.

Three Foreign Companies to Join Tender of PLN Fuel Supply

Tuesday, 13 March, 2007 | 12:10 WIB

TEMPO Interactive, Jakarta: The tender of fuel supply for PT PLN (Persero), the state electricity company, will be bolstered by three foreign companies: PT Sigma Rancang Bangun Persada (Gulf Resources), PT Petronas Wira Niaga Usaha Indonesia (Petronas' business unit) and PT Krida Petra Griya (Shell's business unit).

The three companies will compete with PT Elnusa Petrofin —Pertamina's subsidary— PT Aneka Kimia Raya, and 20 other national companies to be the supplier of the electricity company.

According to the Deputy Head of Fuel Supply of PLN Widayanto, of 46 companies there are only 25 that have handed over pre-qualification documents on the last day of document delivery. Afterwards, according to him, the 25 remaining companies will be evaluated to decide three winners. “We need three weeks,” he told reporters yesterday (03/12) in Jakarta.

Widayanto said that the pre-qualification winners will be announced around mid April. Minimally, three companies must pass the phase. Should the amount be less than three companies, “The pre-qualification process will be started again.” After the pre-qualification phase, there will be a phase for handing over tender documents (price offering).

Furthermore, he stated that there are five locations of electricity generators in Java whose fuel supply will be put on tender: Gas- and Steam-Based Electric Generating Plant (PLTGU) Grati, PLTGU Gresik, PLTGU Muara Tawar, PLTGU Muara Karang and PLTGU Tambak Lorok. “Outer Java is not yet planned. It will perhaps be considered later,” he said.

Nieke Indrietta