Indonesia and Iran are due to sign a deal to develop an oil
refinery on densely-populated Java island worth up to five
billion dollars that will largely target China, an official said.
Elnusa, a unit of Indonesian state energy firm Pertamina, and the
National Iranian Oil Company (NOIC) will sign the deal in the
presence of visiting Iranian President Mahmoud Ahmedinejad,
Syahrul, an Elnusa executive told AFP.
He said NOIC will provide 20-25 percent of the equity for the
refinery project, Elnusa 20 percent and the rest is to be sought
from other sources.
"Seventy percent of the refinery's output will be for export,
notably to China, while the remainder will be for domestic
consumption," Syahrul said.
The refinery will have capacity of 300,000 barrels of oil per day
and NOIC has guaranteed long-term annual supply of at least
100,000 bpd, he said.
"The location for the plant has yet to be agreed on but what is
certain is that it will be in Java," Syahrul said.
The refinery is expected to begin commercial production in 2010,
Ahmedinejad and his Indonesian counterpart Susilo Bambang
Yudhoyono are also expected to sign a memorandum of understanding
on bilateral energy cooperation and several other issues
Indonesia is Asia's only member of the Organisation of Petroleum
Exporting Countries (OPEC) but its oil output has fallen in
recent years to about one million bpd amid flagging investment.