Saturday, February 25, 2006

Iran to invest US$2 billion in Indonesia refinery project

After years of promises and talks, energy minister Purnomo Yusgiantoro reaffirmed yesterday Iran's plan to seriously build the US$1.5 billion to US$2 billion refinery in East Java.
Purnomo said president Susilo Bambang Yudhoyono had ordered him to go to Iran to discuss the plan. Both countries actually had signed a head agreement on the plan. Purnomo and Iranian Oil minister Bijan Namdar Zanganeh signed the agrement in March last year
But Iran seems to have backed off the plan when state-owned company Pertamina signed an agreement with China's Sinopec to build a refinery in Tuban, East Java. Recently, Pertamina started to doubt Sinopec's seriousness.
Last year, Iranian Oil Minister Bijan Namdar Zanganeh said that establishment of a refinery with design capacity of 300,000 barrel per day in Indonesia would provide further security for Iran's market supply.
Under last year's agreement, Indonesia would receive 300,000 barrel per day heavy crude from Iran and Tehran would have 30% share in the refinery project. The project could cost US$3 billion.
"Iran is ready to invest US$1.5 billion to US$2 billion in the project," Purnomo said yesterday as quoted by
National Iranian Oil Company and Pertamina will undertake the project in which Naftiran Intertrade Company will hold 30% stake.

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