Sasol May Invest $10 Billion in Indonesia Fuel Deal (Update1)
By Bambang Djanuarto
Jan. 12 (Bloomberg) -- Sasol Ltd., the world’s biggest producer of motor fuels from coal, may invest $10 billion in an Indonesian plant, said a government official in Jakarta.
Sasol will sign an accord with the Ministry of Energy to study the possibility of a coal-to-oil plant in Indonesia, said Bukin Daulay, head of coal and mineral research at the ministry. Indonesia was Asia’s biggest coal producer in 2007 after China, Australia and India, according to the BP Statistical Review.
Indonesia forecasts oil prices will exceed $60 a barrel in the next five years, making a coal liquefaction project viable, Daulay said. Johannesburg-based Sasol may begin building a plant as early as this year and start production in 2015, Daulay said.
“Discussions with the Indonesian government are at a very preliminary stage,” Jacqui O’Sullivan, a spokeswoman for the company, said in an e-mailed response to queries today, while declining further comment.
“Sasol is seeing this as a long-term project,” Daulay said in an interview today. The government picked Sasol rather than a Japanese company because Japanese technologies aren’t proven, he said. Sasol, which makes more than 40 percent of South Africa’s motor fuel, uses coal-to-fuel technology first employed by Nazi scientists and later refined by apartheid-era engineers. The company is working on China’s second coal-to-fuel plant.
The venture with Sasol may start fuel production at 80,000 barrels a day and later increase the figure to 1.1 million barrels, Daulay said. The South African company may buy coal from PT Darma Henwa, an Indonesian coal mining contractor, and sell the fuel to state oil company PT Pertamina, he said.
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