Electricity Project Hoping for Funds from UN

Monday, 15 January, 2007 | 16:54 WIB

TEMPO Interactive, Denpasar: A garbage-powered electricity generating plant project that is being built in Denpasar is hoping for funds from Clean Development Management of the United Nations.

“The project helps reducing poisonous gas emitions which is in line with the mission of the institution,” said Made Sudharma, Head of the Garbage and Sanitation Supervisory Agency of Denpasar, Badung, Gianyar and Tabanan, yesterday (01/14).

According to Made, development started one year ago by joining together with British company PT Navigate Organic Energy Indonesia.

The task of the company is to organize the areas of garbage disposal in Suwung, the location of the project.

Made explained that there were some models of garbage management that may produce energy such as sanitary landfill technique—a land management that is equipped with special installation—and anaerobic digestion or decomposition using microorganism for new garbage.

New dry garbage such as plastic, glass, iron, and building ruins, he said, require high temperature non-oxygen warming.

The biogas, which is a byproduct of the process, will be utilizes to activate the turbine.

With an anticipated 1,500 cubic meters of garbage per day, electricity production could be between five and eight megawatts.

Rofiqi Hasan

PetroChina Adds Five Wells at Jabung Block

Monday, 15 January, 2007 | 15:35 WIB

TEMPO Interactive, Jakarta: Chinese oil company PetroChina International Jabung Limited will add five new exploration wells in Jabung, Jambi, in 2007.

Zhang Xuewen, General Manager of PetroChina International, said that the adding of the new wells was aimed at maintaining gas production that will be channeled to Singapore through the 450-kilometer long under-sea pipeline.

Zhang explained that the five fields to be developed are located in West Betara and South Betara (two fields each) as well as South West Betara (one field).

For the development, PetroChina has provided investment funds of US$372 million, or Rp3.3 trillion.

“We will use the US$128 million funds as capital investment and the remainder will be used for non-capital investment,” Zhang told reporters in Jambi on Friday (01/12).

According to him, the development of exploration wells at Jabung will require between US$2 million and US$3 million per well with an average production cost of US$7 per barrel.

Compared to last year, the company's investment has increased by US$107 million.

“Last year, we produced 53,725 barrel oil equivalent per day/BOEPD. This year, we want to maintain production at between 54 and 55 BOEPD.”

According to PetroChina data, out of 2006 production of 53,725 BOEPD, 18,200 BOEPD were aimed at gas sales, with 13,125 BOEPD aimed at crude oil sales.

The remainder was the results of condensate and propane-butane gas sales, used in the mixture of liquid petroleum gas (LPG).

Marike Pulonggono, spokesperson for PetroChina, said that the ratio of his company's success reached 83.34 percent this year.

“From six explorations that we carried out, five of them succeeded,” said Marike.

The failed exploration well, he said, was located at North Kabul, Jabung Block.

Zhang said that this year gas production would be intended for Singapore as the selling price there is better.

“Last year, it was at around US$7-8,” he said.

Although most of the gas production will be aimed at Singapore, based on the agreement that Upstream Oil and Gas Executing Body (BP Migas) and PetroChina signed, gas supply will be also intended to meet the demand of Gas-Based Electric Generating Plant of Tanjung Jabung at a price of US$1.

RIEKE RAHADIANA

PGN blames management, technical problems for pipeline delays

Ika Krismantari, The Jakarta Post, Jakarta

State gas company PT PGN has blamed a six-month delay in the opening of a key US$1.1 billion pipeline -- which sent its shares tumbling by 23 percent last week -- on management and technical problems.

The pipeline will span a total of 1,106 kilometers and link South Sumatra and West Java, and have the capacity to transport 1,000 million standard cubic feet per day (mmscfd) of gas. It was originally scheduled to open in December.

PGN's shares fell 23.3 percent last week to Rp 7,400 (US$0.81) from Rp 9,650.

"We should have realized there would be a delay earlier, but because of the explosion the directors, who were appointed in mid-November, were focused on that," PGN president director Sutikno said Sunday.

The explosion he was referring to involved a PGN gas pipeline in Sidoardjo, East Java, the site of the mudflow disaster.

It was not until the middle of December that the directors started analyzing the problems hindering the gas pipeline project, he said.

"We released a statement about the delay on Jan. 11, after we reached a final conclusion on how long the project would be delayed," Sutikno said.

He denied there was any effort on the part of the management to try and cover up the delay.

PGN director for development Adil Abbas said another problem facing the project was the issue of land clearance.

As a result of the delay in the opening of the pipeline, PGN revised down its gas production target for this year to 555 mmscfd from 787 mmscfd.

For 2007, PGN has set aside $517.11 million for a number of different projects, including gas pipelines linking Duri in South Sumatra, Dumai in Riau and Medan in North Sumatra.

Genting BHd to invest US$3 bln in Indonesia biofuel

Kuala Lumpur (ANTARA News) - Genting Bhd plans to invest 3 bln usd to build a biofuel plant in Indonesia, the New Straits Times reported.

Citing sources, the report said the investment will be made through Genting Biofuels Asia Pte Ltd, incorporated in Singapore and wholly-owned by Gecoun Ltd.

It also said that a Genting official has confirmed that the group has entered into a cooperation agreement with a local government for the biofuel venture.

President dedicates projects worth Rp12.9 billion in Tomohon

Tomohon, North Sulawesi (ANTARA News) - President Susilo Bambang Yudhoyono symbolically dedicated five projects worth more than Rp12.9 billion in Tomohon, North Sulawesi province on Sunday.

The head of state was accompanied by Coordinating Minister for Economic Affairs Aburizal Bakrie and North Sulawesi Governor Sarundajang when dedicating the projects.

The function was attended by First Lady Ani Yudhoyono, Dutch Ambassador to Indonesia Nicolaus Van Dam, Agriculture Minister Anton Apriantono, Tomohon Mayor Jefferson Rumajar and Minahasa district head Vreeke Runtu.

Indonesia was still facing fundamental problems of poverty, unemployment and foreign debts, the president said, adding that in efforts to overcome poverty, the government has allocated a budget of Rp51 trillion to help poor families in 2007.

Thus, the head of state called on all layers of the people, including the governors, mayors and district heads, to make concerted efforts to deal with poverty and unemployment.

The president pointed out that the government would increase rice production by two million tons to 54 million tons through an agricultural revitalization program in 2007.

The projects dedicated by the president included a palm sugar factory in Tomohon with an investment of more than Rp8.6 billion employing 38 workers, and a TV5D television studio in the same town with an investment of Rp3 billion employing 51 people.

The other newly dedicated projects include a logistics depot in Pulau Miangas, Sangihe district, with an investment of more than Rp666 million, and a logistics depot in Pulau Marore, Talaud district with an investment of more than Rp663 million.

On the occasion, the head of state also led a ceremony marking the first export of 12.5 tons of palm sugar, and had a meeting with about 4,000 palm sugar farmers.

Gas Negara (PT. PGN) Delays Pipeline by 6 Months; Shares Plunge (Update)

By : Leony Aurora, Bloomberg

Jan. 12 (Bloomberg) -- PT Perusahaan Gas Negara, the biggest gas distributor in Indonesia, delayed opening a key pipeline by six months, triggering a record plunge in its shares.

Gas Negara will delay the shipment of natural gas through a pipeline from South Sumatra to western Java due to open in March until September, company President Sutikno said in a phone interview today. A second link, scheduled to begin operation last November, will start up in March. Sutikno blamed the setback on problems buying land along the route.

The shares tumbled 23 percent on concern that the delay will slash state-controlled Gas Negara's earnings this year. The pipelines, fed by fields operated by ConocoPhillips and state oil company PT Pertamina, were expected to double Gas Negara's sales of the fuel this year as the gas meets surging demand from factories, the company's former president W.M.P. Simandjuntak said in November.

``The company's credibility is not so good now,'' said Christine Salim, head of research at PT Samuel Asset Sekuritas in Jakarta. ``We had made estimates based on the information they're giving. In the future, people will discount information from Gas Negara.''

Gas Negara shares fell 2,250 rupiah to close at 7,400 rupiah, accounting for more than half of the 1.5 percent drop in Jakarta Composite Index. The decline reduced the company's value to 34 trillion rupiah ($3.7 billion). More than 186 million of Gas Negara shares changed hands today, eleven times the three-month daily average.

`Surprised'

The delay of the pipeline comes less than a month after the government sold a 5.31 percent stake in Gas Negara, raising 2.1 trillion rupiah.

``We are surprised to see the sharp price decline,'' State Enterprise Minister Sugiharto told reporters today. ``We didn't know of any delay when we sold the shares in December.''

Analysts at CLSA Ltd. downgraded Gas Negara to ``sell'' from ``buy'' and slashed its 12-month share price forecast to 7,000 rupiah from 18,000 rupiah.

``The coincidence of the December 2006's government placement of a 3 percent stake and today's subsequent disclosure is ironic,'' CLSA analysts Angus Graham and Simon Powell said in a note today.

Sales volume may increase only 42 percent this year, Sutikno told reporters today. The company sold 338 million cubic feet a day of gas on average in 2006, he said.

2006 Profit

Gas Negara's profit more than doubled last year and revenue increased 30 percent, he said. In 2005, revenue amounted to 5.43 trillion rupiah and net income was 862 billion rupiah, Gas Negara said.

Some residents on land where the pipeline will run have requested higher prices and others disputed earlier payments, Widyatmiko Bapang, corporate secretary at Gas Negara, said by telephone today.

A portion of a loan from the Japan Bank for International Cooperation for the pipeline construction was disbursed later than scheduled, Sutikno said. In addition, lack of water in a prolonged dry season made it difficult to test the pipeline, he said on Jan. 5.

Japan Bank is lending 49 billion yen to the project and disbursements are still ongoing with no knowledge of any delays, said spokesman Ryutaro Nishizaki at the Tokyo-based lender.

ConocoPhillips, Pertamina

The first pipeline to be completed will take gas from Pertamina's fields in Pagardewa to Labuan Maringgai on the south tip of Sumatra, and through another segment to Cilegon in Banten, western Java.

Pertamina will send gas at 40 million cubic feet a day in March and will increase supply to 170 million cubic feet a day in end-June, Sutikno said.

The second pipeline will take gas from fields operated by ConocoPhillips in three segments, from Grissik to Pagardewa, Pagardewa to Labuan Maringgai and through to Muara Bekasi in West Java province. The Pagardewa to Labuan Maringgai segment will have two pipelines, of which one may only be completed in September.

Conocophillips will start pumping gas at 50 million cubic feet a day in July and won't be able to increase output as planned this year, Sutikno said.

``ConocoPhillips gas will temporarily pass through the pipeline that carries Pertamina's gas,'' Sutikno said. ``We can't increase ConocoPhillips's output before the second pipeline is completely finished and tested because of pressure problems.''

Calls to Iskandar Mahmud, a spokesman for ConocoPhillips in Indonesia, weren't answered.

Months to Test

After the second pipeline is totally completed in September, it may take months to test the pipeline before gas is delivered to customers, he said.

ConocoPhillips has a contract to supply 400 million cubic feet a day for Gas Negara, while Pertamina will supply as much as 250 million cubic a day.

Gas Negara has to pay Pertamina a penalty of $15,000 a day for the pipeline delay between Nov. 1 and Dec. 30, 2006, Harjana Kodiyat, head of pipeline gas at Pertamina, said by telephone today.

The penalty agreement was canceled when Pertamina's fields weren't ready to pump gas in May last year as scheduled, Gas Negara's Bapang said. ``We don't have to pay a penalty to Pertamina and we don't have such an agreement with ConocoPhillips,'' he said.

Related Article : Press release 12/1/07 - PGN’s CLARIFICATION ON MARKET RUMORS

Govt terminates Exxon contract in Natuna field

Ary Hermawan, The Jakarta Post, Jakarta

The government has finally decided to terminate its oil and gas contract with Exxon Mobil Corp. in the Natuna D-Alpha area of the Natuna Sea, although the American oil giant insists the contract remains valid.

The director general for upstream commercial oil and gas development at the Energy and Mineral Resources Ministry, Priyono, said here Thursday that the letter terminating the contract would be issued in May.

"The Upstream Oil and Gas Regulator will finish processing the legal documents and other administrative matters within three to six months starting from last December," he said during a seminar on the gas potential of Natuna island in Riau Islands province.

The upstream oil and gas regulator sent a letter to the ministry in September recommending that the contract with Exxon in the Natuna Sea be terminated. Energy and Mineral Resources Minister Purnomo Yusgiantoro agreed with the recommendation in a letter issued on Dec. 8 last year, Priyono said.

The production sharing contract for the Natuna D-Alpha block was signed by Pertamina and Exxon in 1980. The contract was later amended in 1995 due to technical difficulties faced by Exxon in developing the gas field.

The gas found in the block has a 71 percent carbon dioxide content, making it expensive to extract. The government decided to give Exxon another 10 years to develop the field and allow it to keep 100 percent of the revenue from gas production under the amended contract.

The amended contract was due to expire in 2005. According to the government, in order to be extended, Exxon was required to furnish a business plan based on comprehensive studies. Exxon, however, argues that it has complied with all of the requirements under the 1995 agreement, which gave it the right to extend the contract twice for a period of two years each time.

Despite the government's decision to terminate the contract, Exxon is upbeat that it will reach a mutually beneficial agreement with the government. "We're always looking forward to a dialog," Exxon spokeswoman Deva Rachman told The Jakarta Post.

The U.S. based firm has spent US$400 million on exploring the block, the biggest in Southeast Asia with 46 trillion cubic feet of recoverable gas reserves, while state oil company Pertamina has spent US$60 million. The two-decade exploration effort has not so far led to actual production, however.

According to a government regulation, responsibility for the development of the Natuna D-Alpha block will now be given to Pertamina. "If Pertamina refuses to develop the block, it will be tendered using one of two different mechanism, a regular tender or a direct offer," said the ministry's director general of oil and gas, Luluk Sumiarso.

It is estimated that the investment needed to develop the block amounts to more than $25 billion.

Gas industry analyst Kurtubi and Oil and Gas Companies Association chairman Effendi Siradjudin said responsibility for the development of the gas field should be handed over to Pertamina.

Another analyst, Andang Bachtiar, suggested that the government develop new blocks in the Natuna Sea. The gas potential in the area amounted to 80 trillion cubic feet outside of the Natuna D-Alpha block.

Legal expert Ryad Chairil said the government would have to be prepared for a long legal battle if Exxon decided to bring the dispute over the Natuna block to the Court of International Arbitration.

Exxon, Conoco, Total, Petronas among bidders for 12 Indonesia oil blocks

AFX News Limited, 01.11.07, 6:21 AM ET

JAKARTA (XFN-ASIA) - The government has received bids for twelve of the 20 new oil blocks being offered via a tender, said R. Priyono, director for oil and gas upstream development at the energy ministry.

The bidders include Singapore Petroleum, ExxonMobil, ConocoPhillips, Andarko, Total, Chevron, Staat Oil and Petronas, he said.

'We are now evaluating the bids,' he told reporters.

He said state-run oil and gas firm PT Pertamina was the only local firm among the bidders.

Pertamina formed a consortium with Staat Oil to develop a block in Makassar Strait, he said.

Lafarge to build two cements plants in Indonesia

Jakarta (ANTARA News/Asia Pulse) - PT Semen Andalas Indonesia, which is owned by France's Lafarge, has announced a plan to invest US$450 million in the construction of two new cement factories.

Semen Andalas will build the factories with a total capacity of 3.1 million tons a year in Aceh Besar and Langkat, North Sumatra, the Capital Investment Board (BKPM) said. The two cement factories will provide 850 jobs, BKPM said.

Semen Andalas' old factory in Aceh was destroyed by the tsunami that swept the province in December 2004.

Wilmar Energy to produce 1 million tons of biodiesel fuel

ika/iwa, The Jakarta Post - 2007-01-10 11

JAKARTA, January 09, 2007 (JP) - Wilmar Energy said Tuesday that its biodiesel fuel production would reach 1 million tons by the end of this year.

A senior executive of the firm said that the expected production would come from its factory in Dumai, Riau.

"This will become the world's largest biodiesel fuel production," he said.

Next month, Wilmar's biodiesel fuel production will reach 350,000 tons per year.

Pertamina to invest US$1.65 bln in projects this year

Jakarta (ANTARA News/Asia Pulse) - The government, as the main shareholder of PT Pertamina, has approved a plan by the oil and gas company to invest up to Rp14.9 trillion (US$1.65 billion) in projects this year.

Most of the funds will go towards the Cepu oil and gas block project in East Java and the Pondok Tengah gas field project in Bekasi, West Java.

Pertamina finance director Frederick Siahaan said funding for the projects will be acquired through a loan worth US$500 million and from other sources including bonds.

Indonesian-Malaysian jv to build palm oil center in Maluku

Jakarta (ANTARA News/Asia Pulse) - PT Indomal Usahasama, a joint venture between Indonesian and Malaysian investors, says it plans to build a US$1 billion Palm Oil Center on the island of Mangole in North Maluku.

The center will include oil palm plantations, crude palm oil (CPO) processing plants, and palm oil-based bio-diesel plants, said Indomal president Chairul Anhar.

He said the company will build a 200,000 hectare oil palm plantation which it expects will produce 5 million fresh fruit bunches a year, along with 7 processing plants to produce CPO with an annual capacity of 120 tons an hour.

Indonesia's SMART, CNOOC, Hong Kong Energy sign renewable energy project

Jakarta (ANTARA News) - PT Sinar Mas Agro Resources and Technology (SMART) said it has signed a cooperation agreement with China National Offshore Oil Corporation (CNOOC) and Hong Kong Energy (Holdings) Ltd for the development of 5.5 bln usd renewable energy project.

The company said in a statement that the project will be developed in three phases over 8 years.

Under the terms of the deal, the parties agreed to develop a bio-diesel project, using crude palm oil as the raw material, as well as producing bio-ethanol using sugar cane and cassava as the raw materials.

Local governments in Kalimantan and West Papua have provided about 1 mln hectares of land to support the project, SMART told XFN Asia.

Telkomsel to invest $1.5 billion this year to enhance network

The Jakarta Post, Jakarta

The country's largest mobile phone operator, PT Telkomsel, plans to expand its network by building 5,000 new Base Transceiver Stations (BTS) this year at a cost of about US$1.5 billion.

With the new stations, Telkomsel hopes to penetrate every subdistrict in Kalimantan and up to 70 percent of all subdistricts in Sulawesi, according to media statement released by the company over the weekend.

Telkomsel currently has 15,000 cellular stations throughout the country, with a third of them being installed in 2006.

With the number of cellular phone users expected to increase by 25 percent from 64 million last year to about 80 million this year, Telkomsel is optimistic it will be able to pick up between 7.5 and nine million new users, or half of all new subscribers in the country.

About 63 percent of the country's total population of 240 million is between the ages of 15 and 50, Telkomsel corporate communications manager Suryo Hadiyanto said.

"These people have an acute sense for technology and a great deal of enthusiasm for technological developments," he said, in explaining the growth of the cellular industry in the country.

According to Telkomsel, the country's cellular penetration now stands at just 25 percent of the total population. However, the penetration rate grew at an average of 67 percent per year from 2001 through 2006.

Telkomsel invested about $1.5 billion last year in expanding its network and added 10.6 million new users, giving the company a total of 34.9 million customers. Its net profit in 2006 as of September increased by 43 percent year-on-year, from Rp 14.59 trillion to Rp 20.92 trillion.

Telkomsel is one of three cellular operators in the country that introduced third generation, or 3G, services last year. So far it has 1.5 million 3G customers nationwide, with services available in 25 cities.

Excelcomindo (XL) had some 130,000 3G customers as of December, while Indosat, which just launched its 3G services in late November, has no precise customer numbers yet, but has targeted 320,000 subscribers by early 2007.

25 companies in competition to provide 400,000 gas stoves

The Jakarta Post - 2007-01-08 10:33

Jakarta, January 06, 2007 (The Jakarta Post) - A total of 25 major companies have satisfied the pre-qualification requirements in the government tender to provide 400,000 gas stoves for low-income households in Jakarta and Banten.

Among the 25 companies, which specialize in the manufacturing of kitchen appliances, are PT Star Cosmos, PT Sanken Argadwija, PT Pindad, PT Rinai Indonesia and PT Maspion.

The winner of the tender, which is part of the government's effort to reduce kerosene consumption and thereby cut fuel subsidy spending, will be announced at the end of January, and production will start in early February.

The government has allocated Rp 58.7 billion out of the 2007 budget for the production and distribution of the stoves.

"According to Presidential Decree No. 80/2003, the winner of a tender worth more than Rp 25 billion is obliged to work together with small and medium enterprises. This also applies to the production of the gas stoves," said State Minister for Cooperatives and Small and Medium Enterprises Suryadharma Ali during a media briefing Friday.

"The winning company will have to sign a written commitment to work with small and medium enterprises, and will face legal consequences if it breaches that commitment," the minister said.

"We are hoping that at least three small to medium-scale industrial hubs in Yogyakarta, West Java and Banten will become involved in the production of the stoves. These hubs have hundreds of people working in this sector," Suryadharma said.

"The gas stoves will be made using 100 percent local content," he added.

The winning company would be required to conduct quality control over the production of the stoves.

The ministry expects to distribute a total of one million gas stoves this year, with the first-phase distribution of 400,000 gas stoves to be conducted between March and May.

Low-income households will be given the gas stoves for free by exchanging their old kerosene stoves through their local sub-district offices.

In mid 2007, about Rp 100 billion more will be allocated from the budget, if the legislature agrees to approve the second-phase of the program, which would see the nationwide distribution of 600,000 stoves between October and December.

According to a government official, the energy content of a liter of LPG, currently sold at Rp 4,250 (about 46 US cents), is equal to the energy content of three liters of kerosene, with the price of subsidized kerosene currently standing at Rp 2,275 per liter.

IDB to help Indonesia set up US$1.5b fund

By Shahriman Johari,

January 4 2007, Business Times

THE Islamic Development Bank (IDB) is helping Indonesia to set up a US$1.5 billion (US$1 = RM3.51) fund which will invest in infrastructure projects in the country.

The fund could help kick-start big-ticket items like the construction of roads, houses and power plants, which is likely to draw interest from Malaysian firms.

However, the fund has yet to be finalised although talks started last year.

"It is a government-led deal. We are waiting for the Government. The discussion started some six months ago. It is still not finalised," Ahmed S. Hariri, director of the IDB's regional office in Kuala Lumpur, told Business Times in a telephone interview.

IDB may invest in the fund and it could also bring along other investors to subscribe, he said.

"We (could) both subscribe and we bring other investors along. Most investors are very comfortable with the IDB name. They will come along with the IDB name," Hariri added.

Companies from Malaysia, one of the top five foreign investors in Indonesia, have been active in the country, notably in the plantation and, more recently, banking sectors.

But there is strong interest in infrastructure projects as well.

Conglomerate Sime Darby Bhd is eyeing potential power plants in the country, while toll highway operator PLUS Expressways Bhd is looking for road projects.

In August last year, Indonesia's president, Susilo Bambang Yudhoyono, invited Malaysian firms to invest in the country's energy, housing and power sectors.

Companies can also bid for some US$150 billion worth of mega infrastructure projects, comprising power, roads, telecommunications, harbours and ports, spread over the next five years.

Indonesia also plans to offer more business incentives and create more economic zones to attract foreign investment.

The country has one economic zone on Batam island and hopes to have more on Riau and other nearby islands, Hariri said.

One recent example of Malaysian investment is gambling group Genting Bhd.

Through its associate Landmarks Bhd, it is investing in a RM4 billion tourism development on Bintan island. That project would have hotels, resorts and tourism attractions like wellness centres.

Bintan is close to Singapore, which is building casinos. Genting is one of the winners selected to build a casino on Singapore's Sentosa island.

Indonesia to build peat land powered electric generators

Xinhua

Indonesia plans to build power plants powered by peat land in West Kalimantan province with the capacity of 60 megawatts, the governor of the province said on Wednesday.

At a press conference after meeting with Vice President Jusuf Kalla, Governor Usman Jafar said that the project was expected to be complete at the beginning of 2008.

He said experts from Finland, which has long experienced using such technology, would be involved to handle the projects.

"We plan to build two (projects, each with capacity of) 30 megawatts, generated by peat land," said Jafar.

The governor revealed that the province has huge potential of the peat land, and in one regency of Pontianak, it has capacity of the peat land of 2.5 millions meter cubic in 100,000 hectares.

The investor of the projects is the Sebukit Power Corp., he said.

In addition, the governor said four other projects, establishing coal-powered electric generators as part of the government plan of building 10,000 megawatt power plants, would also be delivered in 2008.

He said two of the four projects, each with a capacity of 55 megawatts, will be built by the stated-owned electric company of the PLN with financial assistance from the Chinese government.

Two others, with a capacity of 25 megawatts each, will be built by the local company Meta Exi corp., said Jafar.

The governor said that currently his province has been lack at least about 40 megawatts electricity.

Indonesia will reduce its dependency on fuel oil in generating power, according to the vice president.

The country's oil production has been declined due to aging of some oil wells and the slow of finding new wells.

Indonesia's power plants have a total capacity of 25,000 megawatts, but the demand grows by 6 to 7 percent or 2,000 to 3, 000 megawatts annually, according to Mines and Energy Minister Purnomo Yusgiantoro.

Indonesia's electricity sector provides a huge opportunity for investment, but the country only be able to meet 55 percent of the demand in the sector, said Yusgiantoro.

Yusgianoro said that to meet the demand, Indonesia plans to build power plants with a total capacity of 25,000 megawatts.

MMC Unit Wins US$48.2 Mln Indon Project

KUALA LUMPUR, Jan 5 (Bernama) -- MMC Corporation Bhd's subsidiary, MMC Oil and Gas Engineering Sdn Bhd, has won a US$48.2 million contract from PT Transportasi Gas Indonesia.

In an announcement to Bursa Malaysia, MMC said the contract was to undertake phase one of the engineering, procurement, construction and commissioning of the Jabung gas booster compressor station project in Indonesia.

"MMC Oil and Gas Engineering is the leader of the consortium, comprising PECD Construction Sdn Bhd and PT Elnusa Petro Teknik, which won the deal.

"The contract is expected to contribute positively to the future earnings of the MMC Group," it said.

E-tendering will improve transparency, official says

Andi Haswidi, The Jakarta Post, Jakarta

As part of the effort to strengthen transparency in the procurement of goods and services, State Minister for National Development Planning (Bappenas) Paskah Suzetta launched the first stage of an internet-based procurement system Friday that will eventually cover all government projects,

Paskah said the system, which during the first stage would provide information on development projects to be put out to tender, would eventually incorporate the e-procurement systems already operated by a number of ministries and government agencies.

He said the new procurement system would not only speed up the tender and procurement process, but also save taxpayer money.

"As regards measures to increase transparency in line with the 2003 presidential decree, we have managed to save between 20 and 40 percent of the procurement budget from 2004 until 2006," Paskah said.

"With that in mind, we hope that through this new effort to strengthen transparency, we will save between Rp 45 trillion (around US$5 billion) and Rp 90 trillion from the 2007 budget," he said.

Of the total Rp 763-trillion national budget for this year, Rp 504 trillion is allocated to the central government and the rest to local administrations, while about Rp 240 trillion of the total budget will be spent on the procurement of goods and services.

Also speaking during the launch of the new system, Corruption Eradication Commission chief Taufiqurrahman Ruki said that between 10 and 50 percent of the state procurement budget, depending on the government department involved, had been misappropriated in 2006.

"If we take the sum total of budget leakage from every administration, as well as state-owned enterprises, the figure could reach up to Rp 60 trillion in 2006," he said.

Ruki said that even though the new system would not be able to fully eradicate malfeasance in the procurement process, he was optimistic that it would significantly reduce it.

The publication of tender information, dubbed "e-announcement", is the first stage of a more extensive e-procurement program that will eventually involve all stages of procurement, starting with the official announcement and continuing through the bidding process right up to final payment, all carried out electronically through the Internet. The system is scheduled for full deployment next year.

E-announcements can be accessed on-line at www.pengadaannasional-bappenas.go.id, where users are supposed to be able to access an extensive list of government procurement projects for 2007, plus a list of blacklisted companies.

As of the time of writing, however, no lists had been uploaded onto the website.

However, Bappenas Director for Procurement Policy Development Agus Rahardjo said 11 central government institutions, nine provincial governments and 10 municipal administrations were ready to participate in the program.

"Some local administrations hesitated due to technological constraints, but that excuse is no longer acceptable now as Nanggroe Aceh Darussalam has stated its readiness," Agus said, referring to the fact that Aceh is one of the most technologically backward provinces in the country.

Agus also admitted that some national ministries were more prepared than others to participate in the program.

"I fully understand that some ministries have developed their own procurement programs and applications. But not to worry, we can simply adapt these to our system," Agus said.

The Public Works Ministry is one of the central government departments that is most prepared to participate in the program as it has been operating a basic e-procurement system since last year.

"We have succeeded in saving Rp 652 billion from our budget thanks to our semi e-procurement program," said Public Works Minister Djoko Kirmanto, who was also present at the launch.

Burger King to open in Indonesia

Miami (ANTARA News) - Burger King Holdings Inc., the world's No. 2 burger chain, said Thursday said it will begin opening restaurants in Indonesia in June.

Burger King said its subsidiary, BK AsiaPac Pte Ltd. gave development rights for Indonesia to PT Sari Burger Indonesia, which is principally owned by PT Mitra Adiperkasa Tk.

Terms of the deal were not disclosed.

The first restaurant will open in Jakarta.

Burger King operates more than 11,100 restaurants in the U.S. and 65 countries and U.S. territories.

Komatsu to build parts recycling plant in Indonesia

Tokyo (ANTARA News) - Komatsu Ltd will build a new plant in Indonesia to recover engine and axle parts that need repair, refurbish them and then sell them as inexpensive replacement parts, the Nikkei reported, without citing sources.

The company will invest 900 mln yen to build a new plant there, and put it into service by July, the business newspaper was quoted by XFN Asia as saying.

The company already has refurbishing centers in seven countries worldwide, including the US, Australia and Chile, and is looking to add centers in China and India.

By the end of March 2011, it aims to more than double sales in the business to 50 bln yen, the report said.

France's Total Indonesian unit to build 5 gas station in Jakarta

Jakarta (ANTARA News) - Total E&P Indonesie, a local unit of France's Total, is planning to build its first gas stations in Jakarta this year, putting up a total of five, external relations manager Ananda Idris said.

When it does so, Total will be the fourth new player to enter the fuel distribution business in Indonesia. Other operators include Shell and Petronas and state-owned PT Pertamina.

Idris would not disclose the amount of investment earmarked for the stations.

PLN's 3 power projects attract bids from Chengda, China

ANTARA News - 2007-01-03 11:49:25

Jakarta, January 3, 2007 (ANTARA News) - Two groups led by China National Machinery Industry Corp and Chengda Engineering Corp are bidding for three Indonesian coal-fired power projects, an official who is part of the team organizing the tender said.

The three power projects are being tendered by state electricity firm PT Perusahaan Listrik Negara (PLN) as part of a crash program to build new generating capacity of some 10,000 megawatts.

Tondojoyo Suyono, head of the team organizing the tender, said the consortium led by China National Machinery Industry Corp, whose members include China National Electric Equipment Corp (CNEEC) and PT Penta Adi Samudra, is bidding for the Tanjung Awar-Awar power plant in East Java and another plant in Indramayu, West Java.

Meanwhile, the consortium of Chengda Engineering Corp and Truba Jurong Engineering is bidding for the Labuan power plant in Banten.

The Tanjung Awar-Awar and Labuan plants are envisioned to have two generators of 300-400 MW capacity each, while the Indramayu plant will operate three generators with capacity of 300-400 MW each.

The team will need a month to evaluate the bids, Suyono told XFN Asia.

Itochu eyeing railway track project in Central Kalimantan

Jakarta (ANTARA News/Asia Pulse) - The government has received a letter from Japan's Itochu indicating interest in building a railway track in Central Kalimantan, Transport Minister Hatta Rajasa said.

Hatta told the newspaper Investor Daily, however, the government has to pass a law on railway before a decision can be made on the project.

Under the present law no private investor is allowed to handle railway projects without cooperating with state-owned railway company PT Kereta Api Indonesia.

Earlier Hatta said the railway track project will help ease growing congestion in river transport especially in the the Barito river, a vital means of transport in the province.

Indonesia's Bakrie Bros go-ahead for US$1.26 bln gas pipeline project

Jakarta (ANTARA News/Asia Pulse) - The government has given the go-ahead to PT Bakrie & Brothers (BB) to build a 1,200 kilometer gas pipeline from East Kalimantan to Central Java, but said it needs to be convinced that the project is feasible.

BB has won the tender to build the US$1.26 billion submarine pipeline but analysts and Vice President Jusuf Kalla have cast doubt about the feasibility of the project.

Analysts have said gas reserves in East Kalimantan are barely enough to feed its industries such as Bontang liquefied natural gas (LNG) plant and Pupuk Kaltim's urea fertilizer plant.

Indonesia Ciputra eyes 1.2 trln rph projects-paper

Reuters - 2006-12-28 14:26:21

JAKARTA, Dec 26, 2006 (Reuters) - Indonesian property developer, PT Ciputra Development Tbk (CTRA.JK: Quote, Profile , Research), plans to build 1.2 trillion rupiah ($132.2 million) worth of projects that were delayed by the Asian economic crisis, a local newspaper said on Wednesday.

Investor Daily reported Ciputra finance director Tulus Santoso as saying the firm, through its subsidiary PT Ciputra Adigraha, plans to develop a shopping mall, a hotel and an apartment building in Jakarta in the first quarter of 2007.

Ciputra started the project in 1996 but the economic crisis in 1997-1998 forced management to halt development.

"After several delays, the management decided to continue the projects," Santoso was quoted by the business newspaper as saying.

PLN will sign power plant contracts despite protest

Ika Krismantari, The Jakarta Post, Jakarta

Defying protests from other bidders, state electricity firm PT Perusahaan Listrik Negara (PLN) will go ahead with its plan to sign a letter of intent next week to formally name China National Technical Import & Export Corp. (CNTIC) and Harbin Power, also of China, as the winners of the tender for the construction of two 600 megawatt coal-fired power plants in Suralaya in Banten and in Paiton in East Java, respectively.

PLN director of power plants and primary energy Ali Herman said in Jakarta on Friday that the final contracts with the two companies would be signed on Jan. 19.

"There will be a process for adjustment and renegotiation before the contract signing," Ali said.

Commenting on protests from other bidders, he said that PLN would stick to the tender committee's decision on the winners of the two power projects.

On Dec. 8, CNTIC was selected as the winner of the tender for the construction of the Suralaya Baru power plant in Suralaya, Banten, and Harbin as the winner for the construction of the Paiton Baru power plant in East Java, based on the consideration that the two companies offered the cheapest prices for the construction of the two power plants.

According PLN's calculations, CNTIC offered the lowest price of Rp 378 (3 U.S. cents) per kilowatt hour (kWh) for constructing the Suralaya power plant, while its competitor, the Shanghai Maxima consortium offered Rp 378.97 per kWh, the Dongfang-Dalle-HEPEC consortium Rp 379.97 per kWh and the Marubeni-Doosan-PT Tripatra-PT MCC consortium Rp 414.59 per kWh.

For the Paiton power plant, Harbin submitted the lowest price of Rp 385.76 per kWh, while other bidders, the Shanghai Maxima consortium Rp 398.42 per kWh, the China Huadian-PT DGI consortium Rp 420.95 per kWh and the Marubeni-Doosan-PT Tripatra-PT MCC consortium Rp 421.07 per kWh.

However, other bidders, including China Huadian and Dongfang, say that they made better offers with better plant specifications.

In its objection materials, China Huadian said that its offer was $378 million cheaper than the one offered by Harbin Power because it needed only eight months to complete the construction works, shorter than the 36 months offered by the winner.

The objection addressed to CNTIC was submitted by Dongfang, saying that the machine used by the winner had emission was above the normal rate of 750 milligram ---- per cubic meter.

In response, Ali said that the duration for projects had been determined based on PLN's due diligence, saying that the period of 36 months was the most ideal for the construction project.

"All the bidders have also agreed on the duration of 36 months in the first offer. So, it would be not fair to also evaluate the one who offered 28 months," Ali said.

Commenting on the emission issue, he said that he could guarantee that the coal which would be used for the project was the highest quality and contained little sulfur.

He said that if the bidders remained dissatisfied with the result, they could take a legal action, while PLN would stick to its schedule for the projects as part of the government's "crash program".

The program, which is aimed at helping prevent power shortages and cutting the nation's dependence on oil-based fuels for generating electricity, is targeted for completion by 2009.

Ministry to build tsunami escape buildings

DENPASAR (Antara): The Culture and Tourism Ministry will construct tsunami escape buildings in several coastal resort areas, Culture and Tourism Minister Jero Wacik said Tuesday.

"The buildings will be built on beaches which can be used to evacuate tourists and locals in the event of tsunami," Jero said.

"Each building will have the capacity to accommodate 400 to 500 people."

Jero was speaking at the sidelines of a tsunami evacuation drill in Sanur Beach together with State Minister of Environment Rachmat Witoelar and State Minister of Research and Technology Kusmayanto Kadiman.

The escape buildings will be constructed in Bali first then in Pangandaran Beach, West Java and later in West Sumatra. Each building needs a plot of land between 400 to 500 square meters to be provided by local regency or mayoralty administration.

A pilot project will be built in Nusa Dua area where Bali Tourism Development Company has provided a 500-square-meter plot of land. The escape building is to be completed next year.

Jero said escape buildings for other coastal areas would be built in stages depending on the availability of the ministry's budget while welcoming local administrations who wanted to build their own facilities with their own budget.

"This will accelerate the ministry's program to provide safe and secure feelings for holidaymakers," he said

Government retenders four major power projects worth $1.2 billion

Ika Krismantari, The Jakarta Post

The government is reopening the tender for the construction of four power plants worth US$1.2 billion to be built as part of the fast-track program to provide additional electricity supplies of about 10,000 MW by 2009.

President director of state electricity utility PT Perusahaan Listrik Negara (PLN) Eddie Widiono said in Jakarta that the four projects were being retendered because only one of the bidders had satisfied the tender requirements.

The four coal-fired power plants consist of the Banten power plant with a capacity of 300 MW in Teluk Naga, Banten, the 300-MW Pelabuhan Ratu power plant in West Java, the 300-MW Pacitan power plant in East Java and the 600-MW Tanjung Jati power plant in Tanjung Jati, Central Java.

"Those interested in bidding must submit their bids by Dec. 27 at the latest," Eddie said.

He said that the three 300-MW power plants had attracted 24 bidders, while the 600 MW power plant had attracted bids from 19 local and overseas companies.

However, as only one of them was qualified to enter the final round of bidding, the tender, which was launched in July, had been canceled.

A government regulation states that a tender will only be valid if at least three bidders progress to the final round of bidding.

"We hope that the four power plants will be able to commence commercial operations in October 2009," said J. Purwono, the director general for electricity and energy use at the Energy and Mineral Resources Ministry, adding that the winners of the second tender would be announced in April 2007.

The power plants are being put out to tender as part of the government's 10,000 MW "crash program" launched in March, which is aimed at preventing power shortages and cutting the nation's dependence on oil-based fuels for electricity generation.

In October, PLN opened the tenders for the construction of 30 power plants outside of Java and Bali islands, including nine power plants in Sumatra and surrounding islands with a total capacity of 1,428 MW, as well as plants with a capacity of 220 MW in Sulawesi and 400 MW in Kalimantan.

The government has estimated the cost of infrastructure development in the power sector will reach $41.3 billion between 2006 and 2016, including $8 billion under the crash program.

"Considering the limited funding resources for power-sector development, private sector participation in power generation will be encouraged, while transmission and distribution will continue to be handled by PLN," Purwono said.

USAID to help agribusiness to tune of $13.75m

The Jakarta Post, Jakarta

The United States Agency for International Development (USAID) will provide aid worth US$13.75 million over three years in the form of equipment and technical assistance to help the government develop the agribusiness sector, it was announced Thursday.

The scheme, called the Agribusiness Market and Support Activities (AMARTA) program, will be implemented through USAID's main office in Jakarta, as well as its regional offices in Medan, Makassar and Denpasar, in partnership with the U.S.-based development consulting firm, Development Alternatives Inc.

"USAID has awarded a contract to Development Alternatives Inc., of the state of Maryland, to implement the AMARTA project. So, these funds will be disbursed via Development Alternatives Inc," David J. Anderson, chief of party of AMARTA, said Thursday during the launch of the program in Jakarta.

Each office will forge cooperation with the private sector, industry associations, the government, NGOs, chambers of commerce and industry and other stakeholders for the purpose of jointly developing the agribusiness sector in Indonesia, said David.

Under the program, eight sectors would be prioritized: cocoa, coffee, high-value horticultural products (fruit and vegetables), fishing, spices, biofuels and livestock.

"The ultimate goal is to improve productivity and the quality of products so as to ensure better market access," said William M. Frej, USAID's mission director.

Qualitywise, Indonesia's cocoa, for instance, is between 60 and 70 percent below international market standards.

"One of the aims of this project is to improve the quality of the cocoa exported to the U.S. so that we can secure incentive bonuses, rather than a 10 percent reduction from the normal price," said Syukur Iwantoro, head of the Agricultural Quarantine Unit at the Agriculture Ministry.

"After finishing our assessments, we will have identified the primary interventions for the program in collaboration with the stakeholders by the end of 2007," said Anderson.

In general, the AMARTA program will provide assistance such as training, capacity-building, consultation, promotion and facilitation in the agribusiness sector.

Jakarta airport using iris scanner

The Age Company Ltd

Jakarta's busy international airport has introduced an iris scanner system aimed at business travellers willing to pay around $US200 ($A255) per year to avoid long immigration lines.

Under the "Saphire" program, frequent flyers register with the immigration authorities, pay the annual fee, and submit to scans of their left and right eyes, which authorities say are as individual as prints of the fingers or palm.

On arrival, users scan one eye and are cleared for entry, a process expected to take about 10 seconds.

The Indonesian-Dutch venture behind the project says the main thrust of the program was one of convenience, although they hoped that speeding through registered users would allow the authorities more time to scrutinise other travellers for possible security threats.

Australian and US authorities sounded warnings this week of possible attacks on Western targets in Indonesia over the Christmas and New Year period.

The country has been relatively calm lately, with no major attack since suicide bombings on the resort island of Bali in October 2005.

"The government always takes precautionary measures to ensure safe travelling within Indonesia, eventually gaining back trust from the international community," Hamid Awaludin, minister of Law and Human Rights, told an opening ceremony for the scanners.

A spokesman said 550 passengers have already registered to use the service, which is offered by the Schiphol Group, an airport operator based in the Netherlands, and PT (Persero) Angkasa Pura II, Indonesia's state-owned airport managers.

The operators plan to expand to other Indonesian airports and hope to attract at least 20,000 users, mostly Indonesian nationals.

A similar system in the Netherlands has 33,000 members, they said.

Kuwaiti firm eyes gas-to-liquid plan

KUFPEC to build a gas-to-liquid processing plant in Konebada

The National, Papua New Guinea

SYNTROLEUM Corp announced yesterday that it signed a deal with Kuwait Foreign Petroleum Exploration Co on the development of a 50,000-barrel-per-day gas-to-liquids (GTL) facility in Papua New Guinea. This agreement follows the formal statement of support for the GTL facility by Prime Minister Sir Michael Somare. The Prime Minister’s endorsement had paved the way for the grant of priority status to GTL facility.

It was also designated as a lead project in the country’s effort to create a domestic gas monetisation industry using a portion of its significant gas resources. When completed, the plant will produce 50,000 barrels per day of syntroleum ultra-clean S-2 diesel and other high-valued ultra-clean products.

This will make Papua New Guinea one of the few countries where ultra clean, environmentally friendly GTL fuels are produced. The plant will become an anchor facility in the newly-created Konebada Petroleum Park just outside of Port Moresby.

“This is a great achievement for Syntroleum. We have completed our feasibility study, received the PNG Government’s strong support, and have been joined in the project by one of the world’s leading oil and gas exploration companies, KUFPEC. “We are pleased that the project is moving forward with such support,” Jack Holmes, president and CEO of Syntroleum, said.

“Our focus now is to put in place the major contracts for the facility and move to financing.”

KUFPEC’s chairman and managing director Bader N Al-Khashti said: “KUFPEC is excited to be part of the GTL project in PNG with Syntroleum. This project is a stepping stone for us to embrace downstream monetisation of gas resources.”
Syntroleum owns a proprietary process for converting natural gas or synthesis gas derived from coal and other arbon-based feedstock into synthetic liquid hydrocarbons.

The company plans to use its technology to develop and participate in natural gas and coal monetisation projects in a number of global locations.

KUFPEC, formed in 1981 by its parent company, KPC, is an international energy company engaged in the exploration, development and production of crude oil and natural gas in Africa, the Middle East, Asia and Australia. KUFPEC has offices in Kuwait, Tunisia, Indonesia, Australia and Pakistan.