Tangguh LNG plant nearing completion

Ika Krismantari, The Jakarta Post, Jakarta

The Tangguh LNG plant, located in a Papua gas field with proven reserves of more than 14 trillion cubic feet, is entering the final phase of construction and is expected to commence initial production by the last quarter of 2008, an official says.

Kardaya Warnika, chairman of the Upstream Oil and Gas Executive Agency (BP Migas), told journalists Tuesday that the construction of the plant, to be operated by a consortium led by BP Indonesia, was 70 percent completed.

Having already secured more than $2 billion in loans, Kardaya said negotiations between BP and a group of Chinese banks for $884 million in loans were still underway.

To build the plant, the third in the country after the Arun and Bontang LNG plants, BP needs financing of $6.5 billion, of which $3.5 billion consists of loans, with the remainder coming from the company's own resources.

In August last year, BP secured loans of $2.616 billion, made up of $1.2 billion from the Japan Bank for International Corporation, $350 million from the Asian Development Bank and $1.066 billion from commercial banks.

If the latest loan negotiations are successful, the loans from the Chinese banks should be disbursed some time in April.

BP Migas records show that the government has signed contracts with Fujian-China for the delivery of 2.6 mmtpa (million metric tons per annum) of gas over 25 years from Tangguh, with SK Power Korea for 0.55 mmtpa over 20 years, with Posco Korea for 0.55 mmtpa over 20 years and with U.S. West Coast for 3.7 mmtpa over 20 years, with prices ranging from $3.5 to $5.94 per mmbtu (million British thermal unit).

BP Indonesia operates the Tangguh block together with Japan's LNG Corporation, Nippon Oil Corporation and CNOOC.

Uniflora to build cocoa processing plant in Banten, Indonesia

Serang, Banten (ANTARA News/Asia Pulse) - PT Uniflora is planning to invest around US$2 billion in the establishment of a cocoa processing plant in Serang district, Banten province, according to a company official.

"Hopefully, the plant will employ thousands of workers when it is operational," Serang district head Taufik Nuriman said on Wednesday.

Indonesia is the world's third biggest cocoa producer after the Ivory Coast and Ghana, producing around 400,000 tons of cocoa a year, 70 per cent of which is exported.

The processing plant is expected to contribute to the development of the country's cocoa-based industries, Nuriman said.

Britain's BP to build biofuel plants in Indonesia

Jakarta (ANTARA News/Asia Pulse) - British oil giant BP plans to invest around US$50 million in Indonesia's biofuel industry, using jatropha oil as feedstock.

BP will build biofuel plants with an annual capacity of 350,000 tons for which it will need to set up jatropha curcas plantations covering 100,000 hectares of land, to guarantee supply of feedstock, an official said.

Chairman of the national team for biofuel development Al Hilal Hamdi said BP, which is set to dominate the global biofuel industry, has also developed India's jatropha-oil-based biofuel sector.

PT Telkom plans to lower Internet Speedy access rate

Nusa Dua, Bali (ANTARA News) - State telecommunications firm PT Telkom is trying to reduce the rate of Internet broadband access called Speedy by 30 percent in 2007 and by another 20 to 30 percent in 2008, the company`s director Arwin Rasyid said here.

"The plan is part of efforts to participate in the provision of national Internet Protocol (IP) and in the development of local network," Arwin said on the sidelines of the Asia Pacific Regional Internet Conference Operation Technologies (APRICOT) 2007.

By doing so, he said, Internet access rate which is provided by Speedy will be equal to the rates offered by regional operators, he said.

"Cheap Internet access will give many positive impacts and great contribution to the economic and educational sectors," he said.

The role of telecommunications in the national implementation of information and communications technology (ICT) will create effective and efficient IP-based infrastructure through broadband wireline and broadband wireless, he said.

PT Telkom, he said, will take part in the development of broadband wireless-3G service program and Palapa Ring consortium project which is aimed to improve accessibility in the eastern parts of Indonesia.

PT Telkom is committed to the development of the e-business, e-education and e-government application services, he said.

"The objectives of the scheme is to create an acknowledgeable Indonesian community as well as to support telecommunications network development in 43,000 villages, 31,173 junior and senior high schools, 2,428 universities and 28,504 health centers in Indonesia by 2025," he said.

W. Nusa Tenggara to have coal-generated power plants

Mataram, West Nusa Tengara (ANTARA News) - West Nusa Tenggara (NTB) will soon build four coal-generated power plants with a production capacity of 2 X 6 Megawatt to 2 X 25 Megawatt each, a spokesman of the provincial administration said.

"The 2 X 25 Megawatt power plant will be built in Endok Bay of Lombok Barat district," Mangagukang said.

The scheme for the power plants was still being discussed, he said.

He said the construction of the power plants was part of the acceleration program of the power plant development out of Java and Bali, which its bid document was expected to be completed this year.

The 2 X 10 Megawatt power plant would be built in Bima district and the 2 X 6 Megawatt power plant would be built in Badas, Sumbawa district.

The province has been seen as one of the regions facing electricity crisis, he said. The local electricity service office had no longer accepted new clients, despite the fact that 75,000 people have been registered in the waiting list, he added.

Indonesia's SGC to invest US$700 mln in agriculture sector

Jakarta (ANTARA News/Asia Pulse) - Agribusiness firm, the Sugar Groups Company (SGC), plans to invest US$700 million in Indonesia's farming sector.

"The company wants to build a sugar factory and expand its sugarcane plantations by 60,000-100,000 hectares over a period of two years," president Gunawan Yusuf said Monday.

Yusuf said SGC will rely on the government to provide suitable land for the new plantations in any area in the country.

Indonesian, S Korean firms form new company

Jakarta (ANTARA News) - Publicly-listed shipping company PT Arpeni Pratama Ocean Line (APOL) and South Korean Hyundai Merchant Marine Co. Ltd (HMM) have formed a joint venture dealing with sea transportation, a spokesperson said.

An agreement on the cooperation, which was signed by the two firms last February 22, stipulated that both APOL and HMM controls each of 50 percent of the new company, APOL director and secretary Ronald Nangoi told the Jakarta Stock Exchange (BEJ) here Monday.

PT Arpeni Pratama Ocean Line also told the Jakarta Stock Exchange that the former would buy two tankers at a total cost of US$100 million and receive the order in 2008.

Operation of the two tankers will be put under APOL management, the company said.

The plan to buy the two tankers is in line with APOL shareholders? extraordinary meeting, which was held on July 28, 2006, it said.

Data of the Jakarta Stock Exchange showed that as of December 31, 2006, APOL was 30.67 percent controlled by PT Mandira Sanni Pratama, 21.04 percent by PT Mandira Sanni Pratama S/A PT Ayrus, 8.67 percent by Deg-Deutsche Investitions-UE, and 8.34 percent by Mello S/A Cundill Recovery FD.

Indocement, IPB to farm jatropha

BOGOR (JP) : Listed cement producer PT Indocement Tunggal Prakarsa Tbk has signed a memorandum of understanding (MoU) with the Bogor Institute of Agriculture (IPB) to develop a jatropha curcus plantation.

Under the MoU, the IPB will provide seeds while the company will grow the plant on 30 hectares of its land.

President director of Indocement Daniel Lavalle said that the program was aimed at increasing the use of alternative fuels in the company.

"This is in line with the government's program to increase the use of renewable energy and with our Clean Development Mechanism (CDM)," he said.

The CDM is part of the Kyoto Protocol and allows companies in developing countries to host greenhouse gas emissions reduction programs.

The host company then receives a certificate of emissions reduction from the United Nations executive body based on the amount of carbon reduction points that can then be sold to rich countries.

Indocement is the first Indonesian company to implement a CDM project and it has been listed at the executive board of the United Nations.

Jatropha curcas oil produces energy almost equal to that produced by diesel oil. --JP

Coal-waste recycling plant to be built near Bandung

Andi Haswidi, The Jakarta Post, Jakarta

In collaboration with the Bandung regency administration and the Indonesian Textile Association (API), the Industry Ministry plans to develop a coal-waste recycling plant near the West Java capital, a senior ministry official says.

Director General of Metal, Machine, Textile and Miscellaneous Industries Anshari Bukhari said Friday in Jakarta that the construction of the recycling plant, which will convert coal-waste into bricks, paving blocks and road-building materials, would be financed by a central government grant, and contributions from the Bandung regency administration and API members.

The plant will use the coal waste produced by textile firms operating in Bandung regency and surrounding areas, he said.

"Besides the textile industry re-equipment program, we have also allocated Rp 1.5 billion (about US$164,800) for the development of the coal-waste recycling plant this year," Anshari said.

He said the ministry would also develop similar plants in Tangerang, Banten and Purwakarta, West Java, in 2008.

Over the last couple of years, almost all textile producers have switched from using oil-based fuels to coal to run their generators and boilers.

According to a report from the ministry, in West Java province's Bandung regency alone, there are now 4 synthetic fiber plants and 65 other factories that use coal as a power source, with average consumption amounting to 60,000 tons of coal per month.

The burning of coal produces air waste or fly ash, and solid waste known as bottom ash. One ton of coal produces 120 kilograms of fly ash. Therefore, the four fiber plants and 65 factories produce at least 15,000 tons of fly ash per month, the report says.

This figure is expected to increase as more factories switch to coal due to the high prices for oil-based fuels charged to industry.

Bandung Regent Obar Sabarna had previously reported even high figures for coal use than the ministry, saying there were now about 120 factories within his jurisdiction that used coal. However, only one of these, PT Daliatex Kusuma, employed a comprehensive waste management system.

Deliatex was recently appointed by a research and development group from Japan, NEDO, as its partner for the development of water saving equipment for textile dyeing and finishing. The research will cost some Rp 50.6 billion, with about Rp 46 billion of this being provided by NEDO.

"Currently, there is only one waste processing center, which is located in Cileungsi, Bogor, pretty far from Bandung. This makes it too costly for firms to send their waste there," Director General Anshari said.

When asked about how much the recycling plant would cost, Anshari said there was no firm estimate as yet. However, he stressed that the central government would cap its contribution at Rp 1.5 billion, with the rest of the money coming from the province administration and API.

The government has been striving to revitalize the country's textile industry, which has lost competitiveness against overseas producers due to the fact that up to 70 percent of local firms are equipped with obsolete machinery that is more than 20 years old.

Moreover, the industry is also suffering from a flood of smuggled textile and garment products from China and Vietnam. API has reported that of the 1.013 million tons of textile products sold in 2006, about 50 percent of them were smuggled, 45 percent were local products and 5 percent were imported.

To improve competitiveness, the Industry Ministry plans to inject Rp 255 billion into the industry by subsidizing loans for the procurement of new machinery.

However, the plan still has to be approved by the Finance Ministry and the House of Representative.

Black & Veatch to expand Indralaya power plant in Indonesia

Overland Park-based engineering giant Black & Veatch has been awarded a contract to provide engineering, procurement and construction services for the expansion of the natural gas-fired Indralaya power plant in Indonesia. The increased plant capacity will provide needed power supplies to the South Sumatra power grid.

The Indralaya plant is owned by PT PLN, the Indonesia state electricity company. When the expanded plant goes into commercial operation in mid-2008, the plant's output will be increased from 84 megawatts to 124 megawatts of electricity. This is enough energy to power more than 160,000 homes.

Black & Veatch's work involves the addition of heat recovery steam generators and a steam turbine generator for conversion of two gas turbines to combined cycle operations. Combined cycle plants use both natural gas and steam turbine cycles to produce electricity with high efficiency and lower air emissions.

RI, U.S. sign tsunami warning pact

The Jakarta Post, Jakarta

The United States government is to help Indonesia establish a tsunami early warning system that could save lives in the event of another massive earthquake.

The Agency for the Assessment and Application of Technology and the United States National Oceanic and Atmospheric Administration signed Friday an agreement that would sanction the establishment of a system for forecasting tsunamis and delivering warnings.

Under the agreement, the U.S. government will contribute in the construction of two tsunami detection buoy systems, the development of tsunami forecast modeling and training in tsunami detection technology.

The buoy systems will be launched in June and August this year.

Tsunami models can help emergency teams in potentially affected areas plan for events and educate residents on how to protect themselves in the event of a catastrophe.

The U.S. government will give US$1 million to help Indonesia develop the system.

The agreement was a follow-up to a memorandum of understanding signed by President Susilo Bambang Yudhoyono and U.S. President George W. Bush last November about developing a multi-hazard warning system.

"Today's pledged partnership to develop an Indonesian tsunami warning system is one of the first major initiatives to come out of this important agreement," U.S. Embassy Charg‚ d'Affaires John Heffern said in a statement made available to The Jakarta Post on Friday.

Under the agreement, Indonesia and the U.S. will also join the Indian Ocean Tsunami Warning System.

This system, together with another deployed under a partnership with the Thai government, will help provide timely warnings for tsunamis in the Indian Ocean region.

Indonesia has been rocked by large-scale earthquakes in recent years, two of which resulted in devastating tsunamis, in Nanggroe Aceh Darussalam in 2004 and Pangandaran, West Java, in 2006.

An earthquake-triggered tsunami in Aceh in December 2004 wreaked havoc around the rim of the Indian Ocean and killed around 165,000 people in Aceh and North Sumatra.

The tsunami damaged more than 800 kilometers of coastline and destroyed thousands of homes.

In Pangandaran, a 7.2-magnitude earthquake triggered a tsunami that washed away the tourist destination, killing at least 650 people.

Experts have said that death toll from the 2004 tsunami could have been reduced if countries around the rim of the Indian Ocean had been in possession of an early warning system.

Hyundai to produce trucks and buses in Indonesia

Jakarta (ANTARA News) - South Korean automotive giant Hyundai will start producing trucks and buses in Indonesia as of March this year with an investment of US$23 million.

"Hyundai is growing confident it will produce trucks and buses in Indonesia after the government decided to stop importing used cars starting this year," the director general of transport industry and telemathics of the ministry of industry, Budi Darmadi, said here on Friday.

He said Hyundai in cooperation with Korindo Group would set up PT Kostramas Jaya in the building of trucks of above 8.5 Gross Vehicle Weight and large buses.

The new plant which will be built in Balaraja, Tangerang, Banten, West Java, will have a capacity of producing around 300 buses and 200 trucks a month.

He said the US23 million investment would only be for building the plant and providing production facilities. "It excludes funds for land procurement, because the land would be provided by Korindo," he said.

He said Hyundai has a highly prospective market in Indonesia for its trucks and buses following the government`s decision to stop the import of used cars, and in view of the country`s high economic growth rate.

"We hope besides trucks and buses Hyundai would also produce passengers cars in Indonesia," he said.

So far the cars produced by Hyundai in Indonesia included Atoz, Accent and Trajet cars. He hoped Hyundai would increase its investment in Indonesia following an increase in market share for smaller cars.

"We continued contacting Hyundai suggesting them to raise their investment in Indonesia," he said.

In November last year, the Indonesian minister of industry visited South Korea to discuss investment in passenger car production.

Budi said he was optimistic that the automotive market in Indonesia would further develop. He also believed demands for cars would reach 400,000 units this year after dropping last year to around 300,000 only.

"We are optimistic sales would reach 500,000 units by the end of 2008 like in 2005," he said.

Tronoh wins Java power plant deal

Business Times

TRONOH Consolidated Bhd, a Malaysian engineering company, won a contract to build a coal-fired power plant in Rembang in Central Java province, an official of Indonesian state utility PT Perusahaan Listrik Negara said.

The power plant will have two units of 300 megawatts (MW) each, Tony Tondojoyo, head of the tender committee for the project, said by telephone yesterday.

"We haven't signed any contract yet, but according to our evaluation, they are able to build the power plant," Tondojoyo said in Jakarta.

Tronoh, which will partner an Indonesian company on the project, was the sole qualified bidder.

The Indonesian Government last year ordered Listrik Negara to add 10,000MW of coal-fired power generation capacity by 2009 to cut dependence on more expensive oil.

The utility has so far awarded half of the 10 contracts to build power plants in Java, four of which were given to Chinese companies.

A shortage of generators and transmission lines has caused frequent blackouts throughout Indonesia. The South-East Asian nation, with an estimated population of 242 million people across thousands of islands, needs to spend about US$27 billion (RM83.4 billion) on new plants and power lines by 2012 to meet demand, the World Bank has said. - Bloomberg

Bappenas proposes cancellation of 11 foreign-funded projects

Jakarta (ANTARA News) - The National Development Planning Board (Bappenas) has proposed the cancellation of 11 projects funded with offshore loans worth US$370 million made between 2000 and 2006.

"Because we want the loans to be used effectively and efficiently, Bappenas proposes the cancellation of foreign-funded projects which according to the result of our monitoring turn out to be very slow," State Minister for National Development Planning/Bappenas chief Paskah Suzetta said on Thursday.

The projects are ADB-funded health decentralization project worth US$4.9 million and World Bank-funded provincial health project worth US$32 million at the Health Ministry, ADB-funded capacity and profession development project worth US$14.3 million at the National Education Ministry, ADB-funded integrated management project worth US$3 million at the Agriculture Ministry, ADB-funded export development project worth US$72.83 million at the Finance Ministry, ADB-funded coastal and maritime resource management project worth US$4.1 million at the Maritime Affairs and Fisheries Ministry.

The other projects are ADB-funded flood control project in southern Java worth US$3.5 million and Japanese-funded flood control project for Ciliwung and Cisadane Rivers worth US$143.62 million at the Public Works Ministry, Japanese-funded sea disaster-preventing ships worth US$19.35 million, Japanese-funded rating school development project worth US$43.99 million at the Transportation Ministry, and Danish-funded diesel-engined power plants worth US$28.34 million.

"The projects were funded with loans made between 2000 and 2006," he said.

By the end of 2006, the amount of loans pledged by foreign countries and agencies reached US$13.7 billion, of which US$5.9 billion had been disbursed, he said.

"The delay in the disbursement of loans is among others caused by phases of the projects. For instance, the disbursement of loan for construction work cannot yet be made because it still has to wait for land acquisition for the project concerned," he said.

According to the agreement with the House of Representatives` Budgetary Committee, the amount of offshore loans to be withdrawn this year would reach US$4.3 billion, he said.

Data from the Bappenas show that by the end of 2006, the country`s outstanding loans stood at US$1,314.4 billion, accounting for 40.4 percent of the gross domestic product (GDP). The loans consisted of domestic loans worth US$ 693.1 billion or 21.3 percent of the GDP and offshore loans worth US$621.2 billion or 19.1 percent of the GDP

Indonesia to build nuclear power plant by 2016

Jakarta (ANTARA News) - Indonesia will build a nuclear power plant by 2016 at a total cost of around US$1.5 billion, an official said.

"In line with the Presidential Decree No. 5/2006 on the national energy policy, the Indonesian government is intending to continue exploring alternative energy and other forms of energy, to ensure adequate energy supplies," Adiwardojo, Deputy Chairman of the National Atomic Energy Agency (Batan) said here on Thursday.

Indonesia would cooperate with Japan in developing the nuclear power plant as the two countries had signed a Memorandum of Understanding (MOU) on nuclear energy cooperation, he said.

"Japan has been developing nuclear energy for about 50 years for peaceful purposes, especially for its national electrical power supplies," he said.

"BATAN has so far been preparing various technologies needed for developing the alternative energy. Thus, Indonesia is actually ready to further enter the nuclear era," he said.

Indonesia has been operating reactor researches for 42 years without receiving any negative record from national as well as international teams inspecting the operation, he said.

"Of the 13 countries surveyed, Indonesia has received the best record on its nuclear reactor operation," he said.

Indonesia`s first nuclear reactor was inaugurated by the first founding president Soekarno on February 20, 1965. In the beginning, the reactor had a capacity of producing 250 KW of electricity, and it has been increased to 2000 W or 2 MW.

"Over the past 42 years, the Bandung Triga Reactor has been operated for researches in various fields, including health, agriculture, and chemistry. It has also been used for scientific and technological researches by our younger generation," he said.

In cooperation with the Indonesian Chamber of Commerce and Industry (KADIN) and the Japan External Trade Organization (JETRO), BATAN has lately been organizing a series of seminars on nuclear energy to increase the public knowledge and awareness about the use of the alternative energy.

Total, Chevron to open fuel outlets in Indonesia

JAKARTA, Feb. 20 (Xinhua) -- Oil giants Total and Chevron Corp. plan to build and operate retail fuel outlets in Indonesia this year, to heat up competition after the government ended retail fuel monopoly by state-run oil firm Pertamina in 2005, an official said Tuesday,

Royal Dutch Shell and Malaysia's Petronas were the first foreign firms to have fuel outlets in Indonesia after retail fuel business was open to foreigners.

Total and Chevron see Indonesia as a lucrative oil market whose energy consumption is still growing, said Erie Soedarmo, a senior official with the oil and gas directorate of the Ministry of Energy and Mineral Resources.

"Indonesia, which has a population of more than 220 million and a huge energy consumer, provides a big opportunity for retail fuel business," he was quoted by the national Antara news agency as saying.

Total has earlier announced a plan to build five fuel outlets in Jakarta and suburbs as a start, and add the number to around 200 across Indonesia by 2008.

However, according to a government regulation, the open competition applies only to high-octane fuel products which make up only five percent of the country's fuel consumption.

Subsidized fuel products, which control 95 percent of fuel market and whose prices are regulated by the government, remain a monopolistic business of Pertamina.

Indonesia's Humpuss eyes 6 new vessels

Business Times, February 20 2007

JAKARTA: Indonesian shipping company PT Humpuss Intermoda Transportasi Tbk is allocating US$100 million (US$1 = RM3.49) to buy six new vessels this year, the company's chief said yesterday.

Teguh Arya Putra, Humpuss' president director, said the company plans to acquire four chemical tankers, one floating storage ship and a coal carrier this year, to meet its target of 17.6 per cent growth in net profit.

"To meet that target, we are allocating US$100 million this year, which would be used to purchase six ships. We have been talking with some creditors and it is almost final," Putra told reporters.

The company reported a 15.65 per cent increase in net profit to 170 billion rupiah (100 rupiah = RM0.04) last year and is aiming to book a 200 billion rupiah net profit this year.

Humpuss, which has a market capitalisation of US$271.5 million, is engaged in sea transportation and related activities, which involve transporting methanol, liquefied natural gas (LNG), crude oil, fuel and other sea cargo.

It has 14 vessels in its fleet, including LNG carriers and chemical tankers. - Reuters

Japan's JBIC to provide US$980 mln loan to Indonesia

Jakarta (ANTARA News) - PT Tanjung Jati Corp said the Japan Bank for International Cooperation (JBIC) has committed to provide 980 mln usd in loans for the construction of its Tanjung Jati A coal-fired power plant, Bisnis Indonesia reported, citing company president Ambono Janurianto.

"JBIC has indicated that it is ready to finance the PLTU Tanjung Jati A power project because we use Japanese machines, including (machines made by) Toyota Tashu and Tomen Power Corp," Januarianto was quoted by XFN Asia as saying.

He said the power plant will be located in Cirebon, West Java, and will cost a total of about 1.4 bln usd to build.

KNOC finds large oil reserve off Papua

Antara / The Jakarta Post - 2007-02-19 16:03:23

JAKARTA (Antara): Korean National Oil Company (KNOC) has found some 671 million barrel of oil reserve in Wakam Block off Sorong regency, Papua province.

Deputy head of The Upstream Oil & Gas Executing Body's (BP Migas) for planning division Achmad Luthfi said Thursday that the finding in 2006 would significantly add to the national oil production.

"KNOC has to carry out further study about the amount of the oil reserve," Achmad was quoted by Antara news agency as saying Thursday, adding that further study needed to know the exact amount of the oil reserve.

If the oil reserve is confirmed, it will be larger than reserve in Cepu Block in Central Java, he added.

Government Guarantees Infrastructure Financing

Monday, 19 February, 2007 | 16:36 WIB

TEMPO Interactive, Jakarta: The government will guarantee the development of infrastructure projects that are financed by national banks.

This statement was made by the Coordinating Minister for the Economy Boediono.

The guarantee is being given to prevent the banking sector from worrying about the risks involved in loan disbursements to these projects.

The projects that will be guaranteed include those involving public interests and are seriously required for supporting macro economic growth.

However, Boediono was still reluctant to explaining examples of the projects.

“We'll be very selective over the projects that will be guaranteed,” he said last week in his office.

On a different occasion, Bank Indonesia stated it will not loosen its policy on the maximum lending disbursement limit (BMPK) even if loans are used for financing infrastructure projects.

The central bank still limits loan disbursement at 30 percent maximally.

In issuing the policy, said Bank Indonesia Governor Burhanuddin Abdullah, the central bank must refer to international regulation.

As a result, all policies will adopt international standards.

However, he said that the regulation was still flexible, in addition to infrastructure development that state-owned enterprises carried out.

“We will be more flexible,” he said without explaining further.

ANTON APRIANTO | SURYANI IKA SARI

Indonesia – Iran Fertilizer Factory to be Built by End of Year

Monday, 19 February, 2007 | 15:08 WIB

TEMPO Interactive, Jakarta: The government has confirmed that the construction of joint venture fertilizer factory in Iran by both Indonesia and Iran will be carried out by the end of 2007.

This was conveyed by Fahmi Idris, Industry Minister, after the signing of a Memorandum of Understanding (MoU) between PT Pupuk Sriwidjaja and National Petrochemical, Iran, last weekend in Jakarta.

Fahmi said that after the MoU finalization, it is expected that the factory construction can be realized soon.

“It is hoped that the project can be implemented by the end of the year,” he said.

Fahmi went on to say that the MoU between the governments had been signed in November, 2006.

The fertilizer factory will be built in Iran with fifty percent ownership belonging to each country.

The plan to build the fertilizer factory is based on the limitations of domestic gas supplies.

In Iran, said Fahmi, gas supplies are abundant and the price is far cheaper.

“The gas price in Iran is US$1 per mmBtu, here (Indonesia) fertilizer factories buy gas for US$4 per mmBtu,” he said.

The fertilizer factory, said Fahmi, will produce 990,000 tons of ammonia per year, with ammonia producing around 1.15 million tons of ures-based fertilizer.

He explained Iran will sell its gas at a price of US$1 for ten years to the joint fertilizer factory.

The source of funds to build the fertilizer factory in Iran, according to Fahmi, was the government’s capital investment and Pupuk Sriwidjaja’s internal funds.

“The amount (for 50 percent ownership) hasn’t been final yet, but it’s between US$200 million and US$250 million,” he said.

Dadag Heru Kodri, Pupuk Sriwidjaja’s Managing Director, said that the second point of the MoU iwa that each owner’s obligation is 50 percent.

According to him, in the MoU, his side had asked for the gas price to be US$1 with 10 years guarantee and 20 years of supply.

Alwi Shihab, the President’s special envoy for the Middle East, said that there are a number of financing organizations that support fertilizer factories.

“Among these is the Islamic Development Bank,” he said.

RR ARIYANI

Singapore's Sembcorp Marine wins US$80 mln contract in Indonesia

Singapore (ANTARA News) - Sembcorp Marine said has won an 80 mln usd contract to build two offshore platforms for TOTAL E&P Indonesie.

It secured the contract through its unit SMOE Pte Ltd's subsidiary PT SMOE Indonesia.

"PT SMOE Indonesia will undertake engineering, procurement, construction, transportation, installation, hook up and commissioning for a manifold and a compression platform to be installed in Indonesia's Tunu Field, which is located on the East of Kalimantan," Sembcorp Marine told XFN Asia.

The platforms are expected to be completed by the first quarter of 2009.

The contract is not expected to have any material impact on Sembcorp Marine's financial performance this year, the company said.

Nutricia extends tender offer for Indonesia's Sari Husada

Jakarta (ANTARA News) - Dutch firm Nutricia International BV will extend a tender offer to buy shares of Indonesian health food maker PT Sari Husada it does not already own from minority shareholders by one month or until March 20.

Nutricia owns 93.52 pct of Sari Husada.

The minority shareholders hold a combined 1.33 pct stake in Sari Husada.

The remainder is comprised of treasury stock owned by Sari Husada founders.

Sari Husada said that in the first tender offer period that ended yesterday, Nutricia has bought 22.22 mln shares or about 85 pct of the shares held by the minority shareholders.

Foreign firms eye RI greenhouse projects

Adianto P. Simamora, The Jakarta Post, Jakarta

Many foreign investors are considering becoming involved in developing greenhouse gas emission reduction projects here in Indonesia as a result of the country's huge potential, an official says.

Prasetyadi Utomo, the secretary to Indonesia's Designated National Authority (DNA), a unit of the State Ministry for the Environment, predicts that there will be at least 10 projects under the Clean Development Mechanism (CDM) submitted by local companies for approval by the government this year.

Under the Kyoto Protocol, which Indonesia has ratified, gas emission reduction projects have to be approved by the United Nations. Project developers are entitled to receive certified emission reductions (CER) from the UN, which can later be used by developed nations to meet their Kyoto protocol targets for reducing gas emissions.

A CER unit stating a one-ton reduction in carbon dioxide is estimated to be worth between US$7 and $8.

"We are in the final stages of approving four CDM projects," Prasetyadi Utomo, the secretary of Indonesia's Designated National Authority (DNA) on CDM at the state ministry told The Jakarta Post on Wednesday.

The DNA, which was set up in 2005, is tasked with approving such projects before submitting them to the UN's Executive Board.

The four projects consist of a mini-hydro scheme, the use of coconut shells to generate electricity, limiting the use of nitrous oxide in the manufacturing of explosives, and methane extraction during tapioca-starch production.

Prasetyadi said that the mini-hydro project consisted of four small-scale power generating plants in Central Java and West Java, and would be developed by PT Indonesia Power in partnership with Japan-based Chugoku Electric Power Co. Inc.

"The project is expected to generate up to 21,139 tons of carbon reductions per year," Prasetyadi explained.

He said that so far, eight Indonesian CDM projects had been registered with the UN Executive Board. The eight projects could produce emission reductions of up to 1.5 million tons per year.

"Many of the project promoters are from Japan. We hope that more investors from the European nations will locate CDM projects in Indonesia this year," he said.

A statement from the British Embassy in Jakarta said that a delegation of 12 British investors would meet Indonesian CDM project developers during a two-day visit starting Thursday.

"The range of services available from the UK climate change companies is extensive and includes CDM project development and financing, carbon fund management, technology provision, carbon brokerage services, validation and verification, and legal services," the statement said.

The Kyoto Protocol requires developed nations to cut greenhouse gas emissions by 8 percent below 1990 levels in the period between 2008 and 2012.

By contrast, developing countries can host projects to reduce the gases. Indonesia, which ratified the protocol, is not required to reduce its emissions and thus is a potential host country.

The state ministry said that Indonesia had the potential to supply two percent of the global CDM market, or the equivalent of a 125-million-ton reduction in carbon dioxide.

It said that the energy and industrial sectors produced the largest share -- up to 60 percent -- of total emissions in Indonesia.

Fossil and coal-based fuels are believed to be the main causes of greenhouse gas emissions that lead to global climate change.

ADB Funds Water Quality Study in West Tarum Canal

ADB - 15 February 2007 - In response to Jakarta's serious water problems, ADB is funding a study on water quality in the West Tarum canal, which provides 80% of the capital city's freshwater supply.

Read the full story

Barrick Gold Seeks New Mines in Indonesia, Papua New Guinea

By Tan Hwee Ann

Feb. 14 (Bloomberg) -- Barrick Gold Corp., the world's largest gold miner, is seeking new mines in Indonesia, Papua New Guinea and Australia as it looks to add to its Asian production.

Countries in the so-called `Ring of Fire' region, including Indonesia and Papua New Guinea are ``very prospective,'' Joc O'Rourke, president of Barrick Australia Pacific, said today in an interview in Perth.

Barrick last March bought Placer Dome Inc. to become the largest gold miner. The Toronto-based company been seeking to add to its mines in Australia, South Africa, Tanzania and Nevada as prices of bullion more than doubled in the past five years

``There are some fantastic minerals resources in Papua New Guinea and Indonesia, and the Philippines has some,'' said O'Rourke. There's a also a ``big opportunity,'' in South Australia where some early discoveries suggest similar geology to the BHP Billiton Ltd.'s Olympic Dam mine, he said.

The Olympic Dam mine in South Australia has the world's sixth-largest copper and tenth-largest gold deposits, according to BHP Billiton, the world's largest mining company.

Barrick last November signed an agreement with Integra Mining Ltd., allowing it to take an 80 percent stake in the Oodnadatta gold and copper project in South Australia for A$3 million ($2 million).

Labor cost increases in Australia have slowed, said O'Rourke. The rate of turnover at Barrick ``peaked early last year, and is slightly down now,'' he said. Labor costs have surged in Australia as miners compete with each other to expand projects.

To contact the reporter on this story: Tan Hwee Ann in Perth at hatan@bloomberg.net

US offers sweet deal to help Indonesia produce more cocoa

Jakarta (ANTARA News) - The United States on Wednesday announced a training programme to help Indonesian farmers battle cocoa bean-eating pests and boost exports to one of America's largest chocolate manufacturers.

Indonesia is the world's third largest cocoa producer, after Ivory Coast and Ghana.

The US Agency for International Development has facilitated an agreement between Blommer Chocolate Co. and supplier PT Olam Indonesia to train farmers on Sulawesi island to improve productivity and tackle the cocoa pod borer, the US embassy was quoted by AFP as saying in a statement.

The moth-like pest lays its larvae in cocoa pods, reducing yields by up to 60 percent and leaving the farmer with a poor quality crop.

Sulawesi's farmers lost 127 million dollars last year due to the ravages of the pest, the embassy said.

The training programme would also help them to improve productivity and quality by 30 percent, enabling them to increase production by 35,000 tonnes a year, it said.

Blommer has agreed to buy premium quality beans at above market value.

The US imported 136,000 tonnes of cocoa from Indonesia in 2005, with American chocolate manufacturers buying about 40 percent of Sulawesi's cocoa butter exports, the embassy said.

Antam, BHP form alliance to develop Halmahera nickel deposits

Jakarta (ANTARA News) - Publicly-listed mining company PT Antam Tbk announced on Tuesday it has signed a heads of agreement establishing an alliance with BHP Billiton to explore the joint development of an extensive nickel laterite resource on the eastern Indonesian island of Halmahera.

The heads of agreement was signed in Perth, Australia, during the Asia Pacific Economic Conference by Antam`s President Director, D. Aditya Sumanagara and BHP Billiton Stainless Steel Materials President, Jimmy Wilson.

The alliance will investigate development of pyrometallurgical and hydrometallurgical processing routes for the Buli deposit on the island and other ore bodies, it said.

This move is in line with Antam`s strategy to move into higher technology and downstream metals processing activities. This strategic alliance with BHP Billiton is also expected to mitigate the cost and risk of developing mineral deposits.

"Mining and metals processing is a capital intensive, long term business. With this move, which is still many years away, we hope to ensure our future competitiveness in the nickel sector. The alliance would immediately commence a project study to develop hydrometallurgical and pyrometallurgical processing technologies on Halmahera Island," Sumanagara said.

The project study represented a significant opportunity to jointly develop a world class nickel resource with considerable long term benefits to Indonesia.

Through the alliance study, Antam and BHP Billiton are committed to achieving leading mining industry best standards in safety, environmental and community practice.

The project study phase will provide employment and support local businesses.

Following the signing, Antam and BHP Billiton will move towards the formation of a joint venture company for the alliance. Antam and BHP Billiton expect the joint venture agreement will be completed by end of 2007.

Indonesia gets US$92.8 mln World Bank loan for farmer empowerment

Jakarta (ANTARA News) - The World Bank said its board has approved a combined 92.8 mln usd loan package to support a farmer empowerment project in Indonesia.

The project aims to help 400,000 Indonesian farm households improve productivity and incomes over the next five years, it said.

Total project cost is 123 mln usd, with Indonesia providing the balance of funding, the World bank was quoted by XFN Asia as saying.

Total project cost is 123 mln usd, with Indonesia providing the balance of funding, it said.

World Bank country director Andrew Steer said the project will support development of a market-oriented agricultural services system based on partnerships among farmers' groups, public agencies and private sector enterprises.

He added that improving agricultural productivity remains perhaps the best single measure to reduce poverty in Indonesia, with almost two-thirds of the nation's poor consisting of farmers.

Indonesia's poverty rate as a percentage of the total population stood at 17.75 pct as of March 2006, with some 39 mln people living below the poverty line, the World Bank said.

Indonesia's BSP to build four more CPO processing plants

Jakarta (ANTARA News/Asia Pulse) - Publicly listed plantation company PT Bakrie Sumatera Plantations (BSP) (JSX:UNSP) said it plans to build four more crude palm oil processing plants in Sumatra at a total estimated cost of US$22 million, BSP Development Director M. Iqbal Zainuddin said.

Currently BSP has two CPO processing plants in Jambi and West Sumatra to process fruits from its plantations.

The company produces 150,000 tons of CPO annually.

Petrogres eyes chance to set up organic fertilizer firms outside Java

Surabaya, East Java (ANTARA News) - Fertilizer manufacturer PT Petrokimia Gresik (Petrogres) has been studying a plan to set up organic fertilizer factories in some areas outside Java, a spokesperson has said.

The high demand for organic fertilizer outside Java has encouraged PT Petrogres to have the plan, Petrogres director Arifin Tasrif said here.

"Before realizing the plan we should study some aspects including raw materials for organic fertilizer. Lampung province seems to be a right place to set up the organic fertilizer factory as it has enough raw materials," he said.

Raw materials for organic fertilizer are manure and sugarcane wastes, he said, adding that an organic fertilizer factory needs an investment value of Rp1 billion to produce 10 tons of organic fertilizer per day.

Until now, he said, Petrogres has already set up 20 organic fertilizer firms dubbed Petroganik in 20 districts in East Java.

Arifin said eight of the Petroganic firms have already operated commercially while the 12 others are under an equipment fabrication process.

"We hope we could set up 30 other Petroganic firms in East Java this year as both investors and farmers are really demanding for more organic fertilizer firms and organic fertilizer price is far lower than that of the chemical one," he said.

Organic fertilizer is sold at Rp1,400-Rp1,500 per kg while inorganic one at Rp2,500 per kg.

Meanwhile, in an inauguration of five Petroganik firms in East Java`s district of Magetan, Agriculture Minister Anton Apriyantono said the government planned to make the use of organic fertilizer to the utmost to reduce the dependence on chemical fertilizer.

Anton, however, did not say whether or not the government would subsidize the making of organic fertilizer as it had done for the inorganic fertilizer production.

Loan 2285-INO (SF): Sustainable Aquaculture Development for Food Security and Poverty Reduction (ADB)

Request for Expressions of Interest (EOI) - Invitation for Shortlisting for Consulting Services

Asian Development Bank

The Government of Indonesia invites reputable consultant firms from ADB's member countries, in association with qualified national consultant, to provide consulting services for Project Management Consultant (PMC) for Project Management Office (PMO) and Project Implementation Unit's (PIU) for the Sustainable Aquaculture Development for Food Security and Poverty Reduction Project (SAFVER), funded by Asian Development Bank under Loan No.2285-INO (SF).

SAFVER supports the government's program to promote sustainable and community-managed freshwater, brackishwater, and marine aquaculture development to benefit poor fish-farming communities. SAFVER will be implemented in five districts in four provinces:

1. Langkat in North Sumatera;
2. OKI in South Sumatera;
3. Karawang and Sumedang in West Java; and
4. Buton in South East Sulawesi.

Read more about the project

Chemical manufacturer gets loan from Japanese firms

Jakarta (ANTARA News) - Indonesia`s chemical manufacturing company PT Budi Acid Jaya has secured a US$3.5 million loan from Japan`s Nedo Fund and Sumitomo Mitsui Banking Corporation, a spokesperson said here Friday.

The fund will be used for development of a biogas-fueled power plant, PT Budi Acid Jaya President Director Santoso Winata told the Jakarta Stock Exchange.

The loan carries an interest rate of 2 percent, higher than that of Sumitomo Mitsui Banking, he said.

The loan with a period of grace until 2012 will be repaid after the power plant has been fully operational, he said.

Budi Acid Jaya`s core businesses are manufacturing and selling tapioca starch, citric acid and other chemicals, monosodium glutamate, plastic bags, glucose and modified tapioca starch.

The tapioca starch is marketed under the Red Mountain and Green Mountain brand names. The group`s factories are located in Subang, Lampung and Jambi with their products sold at home and abroad.

The business group was set up on January 15, 1979 under the name of PT North Aspac Chemical Industrial Company.

Govt to hold first tender for CBM gas

Ika Krismantari / The Jakarta Post - 2007-02-09 11:14

Jakarta, February 9, 2007 (The Jakarta Post) - The government will hold its first-ever tender for the exploration and production of coal-bed methane (CBM) gas in March to meet the growing demand for gas for both local use and exports.

The Energy and Mineral Resources Ministry's director of upstream oil and gas development, R. Priyono, said Thursday that the government would put on the table concessions in two areas that are believed to hold the biggest deposits of CBM — one in Sumatra that is estimated to hold 183 trillion cubic feet (tcf) and the other in Barito, South Kalimantan, estimated to contain 101.60 tcf.

The tenders would be conducted on a direct offer basis. "Currently, there are six investors interested in bidding," Priyono said, adding that among them were state oil and gas firm Pertamina and Australian oil and gas company Santos.

He said that the government was in the process of resolving all matters associated with the tenders, including arranging much-needed incentives to overcome the high cost of exploiting CBM deposits.

"We are also considering how to overcome potential conflicts with coal miners," he said.

CBM is a natural gas formed by the activity of microbes during the coal-forming process, which then becomes trapped amid coal beds.

Indonesia has total estimated CBM deposits of 453 tcf, or about 81.5 billion barrels of oil equivalent, which are the world's second largest after China.

However, many investors have expressed doubts about putting their money into CBM as the government has yet to issue the necessary regulations or give details of the promised incentives.

Upstream Oil and Gas Executive Agency (BP Migas) chairman Kardaya Warnika said last month that the government was considering offering a split of 70 percent to 30 percent in favor of the investor.

This would be much more favorable than the split in the case of regular gas production, which is 35 percent for the investor and 65 percent for the government.

Under its blueprint for the development of CBM, the government is targeting the production of 1 billion standard cubic feet per day (bcf), or about 0.18 million barrels of oil equivalent, by 2025.

Bakrie Telkom to invest Rp 2t on expansion

The Jakarta Post - 2007-02-09 11:24:48

Jakarta, February 9, 2007 - PT Bakrie Telecom Tbk (BTEL), a business unit of Bakrie Brothers, will allocate Rp 2 trillion (about US$222 million) in capital expenditure to finance the company's expansion this year.

"The money will be raised from financial institutions and internal sources," the company's president director, Anindya N. Bakrie, said following a shareholders meeting Thursday.

Anindya said that the new investment funds would be used to double the number of the company's Base Transceiver Stations (BTS) to 800 BTS from 400 BTS at present.

He added that the company would expand its services to 17 more cities, including Surabaya, Medan, Semarang and Yogyakarta this year, in addition to its existing 15 coverage areas in Jakarta, West Java and Banten.

"We plan to increase the number of subscribers to 3.6 million this year," he said, adding that in 2006 the company signed up 1.5 million subscribers, more than the targeted 1.3 million.

He said the company now held an 1& percent share of the market in Jakarta, West Java and Banten.

As of November 2006, the telecommunication unit of Bakrie Brothers has earned Rp 704 billion in revenue, a 131 percent increase from the same period last year.

President director of PT Bakrie Brothers, Bobby Gafur Umar, said that he expected BTEL would contribute 30 percent of the widely diversified business group's total revenues within the next two or three years from 16 percent last year," he said.

German Aid of Rp20 Billion for Solo

Thursday, 08 February, 2007 | 17:09 WIB

TEMPO Interactive, Solo: The municipal government of Solo, Central Java, is to receive aid amounting to Rp20 billion from the Germany Institute.

This organization of German donor representatives for Indonesia will provide equipment and machinery for the Solo Techno Park that is currently being prepared by the municipal government.

“The grant will be handed over in two stages. This year, equipment and machinery for automotives and garments will be provided. The remainder will be given next year,” said Masrinhadi, the Solo City Head of the Industry, Trade and Investment Service, this afternoon (8/2).

The 28-hectare Solo Techno Park is an integrated area for industrial, trade and service activities, and also contains educational facilities.

Solo Techno Park is designed to produce around 2,000 automotive experts and 15,000 garment graduates who will be ready to work.

Even though it has not yet been realized, the Solo Municipal Government is generating cooperation with many parties, such as automotive entrepreneurs and the Indonesian Textile Association (API).

The Indonesian Oil and Gas Association is even interested to train experts in drilling.

Imron Rosyid

Indonesian-Malaysian team to bid for Jakarta toll road project

Jakarta (ANTARA News/Asia Pulse) - State-owned toll road building company PT Jasa Marga said it will team up with PT Astratel and Malaysia's Cahaya Mata Serawak Bhd in a tender for the construction of a toll road in Jakarta.

Jasa Marga is eyeing the projects of Serpong-Kunciran and the Kunciran-Cengkareng sections of the Jakarta Outer Ring Road, expected to cost around Rp4.4 trillion (US$488.8 million).

Jasa Maga president Frans Satyaki Sunito said Jasa Marga wants to maintain a majority share in the consortium with the two partners.

More foreign aid pours flood victims

JAKARTA (Agencies): More foreign countries have expressed their commitments to help flood victims in the capital and its surrounding, whose houses and properties have been inundated since last Friday.

The Dutch government said it is sending US$1.3 million to Indonesia to help bring relief to millions of people hit by deadly flooding in the capital, Jakarta.

Overseas Development Aid Minister Agnes van Ardenne said half the money would be used to buy food, medicine, clothes and blankets for victims. The other half would buy rubber boats to ferry them around the inundated city."As good friends, it goes without saying that we would help Indonesia now that 75 percent of Jakarta is underwater," Van Ardenne was quoted by AP news agency as saying.

Meanwhile, the European Union said Tuesday it would give US$777,300 to help flood victims in Jakarta.

The U.S. Australia, and Japan have previously also expressed their commitments to help flood victims.

RI signs deal with Baxter to produce bird flu vaccine

JAKARTA (AP): Indonesia, the country hardest hit by bird flu,signed a preliminary deal Wednesday with U.S. drug manufacturer Baxter Healthcare Corp. to jointly produce a human bird flu vaccine.

Under the memorandum of understanding, Indonesia will provide strains of the H5N1 virus circulating in the nation and Baxter will offer technical expertise to produce the vaccine, said Indonesia's Health Minister Siti Fadilah Supari.

The deal did not give a date when production would start.

Govt to hold tender for home solar-power units

JAKARTA (JP):The government, pressing ahead with its program to electrify underdeveloped regions across the nation, will next month hold a tender for the procurement of 30,000 home solar-power units.

One home solar unit can generate between 50 and 80 watts of electricity.

J. Purwono, director general for electricity and energy use at the Energy and Mineral Resources Ministry, said Tuesday that the government had allocated Rp 247 billion (US$27.4 million) for the project.

"We have opted for solar energy as it will be cheaper than building power plants," Purwono said. "With an estimated price of Rp 8 million for each unit, it will definitely be much more economical."

Currently, out of Indonesia's total population of 260 million, about 100 million people living outside Java and Bali islands do not have access to electricity.

Based on 2006 figures, state electricity firm PT Perusahaan Listrik Negara (PLN) can only light up 54 percent of Indonesia's villages given that its power plants have a total generating capacity of only 25,000 megawatts.

The solar-power program, to be jointly run by the Energy Ministry and State Ministry for Disadvantaged Regions, aims to provide 30,000 solar units with capacities ranging from 50 watts to 80 watts per unit.(ika)

Indonesia's largest biodiesel plant to come on stream in May

Jakarta (ANTARA News/Asia Pulse) - PT Bukit Kapur Reksa, a subsidiary of Wilmar Energy, is building the country's largest biodiesel factory in the Pelintung Industrial Estate in Dumai, in Riau.

The factory will need one million tons of crude palm oil (CPO) as raw material, an official of the Riau Plantation Office said.

He said construction of the factory started in December 2006 and was expected to be completed and start operation in May this year.

Govt lifts VAT from primary products

The Jakarta Post, Jakarta

In order to boost the farm sector, the government has lifted value-added tax (VAT) on a variety of goods and commodities, including agricultural machinery and primary agricultural products.

Under a new government regulation, there are six categories of goods that will be exempted from VAT.

These include capital goods, such as engines, factory machines and machine tools, both in knocked-down or built-up form, and feeds and feed ingredients for livestock, fowl and farmed fish.

Also exempted from VAT are farm produce, seeds for agriculture and market gardening, fish and livestock seed, clean water distributed through pipes, and electricity, except for domestic use, where the power supply is higher than 6,600 watts.

The new regulation provides that agricultural produce, including that produced by enterprises operating in the agricultural, market-gardening and forestry sectors, will also be exempted form VAT.

Sumitomo Corp wins 14 bln yen georthermal order in Indonesia

Jakarta (ANTARA News) - Sumitomo Corp has received a 14 bln yen order to expand a geothermal power generation facility in Indonesia, the Nikkei reported, without citing sources.

The order entails delivery of equipment made by Fuji Electric Systems Co with an output capacity of 117,000 kilowatts, the business daily said.

Local power company Star Energy Holdings Ltd is overseeing the expansion at the Wayang Windu geothermal plant in West Java, with major construction firm PT Rekayasa Industri handling the steam-related systems, it said.