IEV invests $230m for LPG, CNG projects

The Jakarta Post , Jakarta | Mon, 07/14/2008 10:08 AM | Business

Malaysia-based gas company PT IEV Energy plans to invest US$230 million to build several mini-liquefied natural gas (LNG) and compressed natural gas (CNG) projects in Indonesia, the company's president director says.

Christopher Nghia Do said Saturday his company would allocate the fund over the next five years.

The first two mini LPG projects will be built in Sorong of Papua province and in Surabaya, East Java.

"We're doing some feasibility studies for the projects and hope that we can get permits from the regional governments immediately," he said, adding that the projects were scheduled to be completed in 2010 and 2011.

The company also plans to construct two projects in Central Java and West Java.

"We have yet to decide the locations because we're still looking for the places where we can most easily explore gas."

He said the company would allocate $25 million of the fund in the first year to build the country's first's certified CNG compressing station, the construction of which officially began Saturday in Cikarang, Bekasi.

"This station hopefully can attract many customers, including industries and public vehicles," he told journalists at the new station.

Christopher said the project would provide cleaner and more affordable fuel for public vehicles.

"Drivers will only spend $10 per MMBTU (million British thermal units) of CNG. It's cheap compared to the $28 per MMBTU cost of diesel," he said.

Vice President Jusuf Kalla said he had called on drivers to change from gasoline or diesel to CNG, citing its friendlier impact on the environment.

"Besides, the use of CNG will indeed help the government to cut its fuel subsidy," said Kalla, who was also present at the launch.

In the 2008 state budget, the government allocates Rp 126.8 trillion for the fuel subsidy, or equivalent to 12 percent of the government's total expenditure. (ewd)

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