Apr 19 00:37
Bakrie Sumatera builds biodiesel plant

Jakarta (Antara News) - PT Bakrie Sumatera Plantations Tbk (BSP), in association with PT Rekayasa Industri (Rekin), will soon build a bio-diesel plant with a capacity of 60,000 to 100,000 tons a year at a cost of US$25 million.

Managing Director of PT BSP Ambono Janurianto disclosed here Tuesday the bio-diesel plant to be built in Jambi or Batam, will be run by PT Bakrie Rekin Bio-Energy, a joint venture company set up by PT BSP and PT Rekin.

PT BSP holds 70 percent of the capital invested in the project and the remaining 30 percent of is controlled by PT Rekin, Ambono further said after he and Rekin`s Managing Director Triharyo Indrawan Soesilo signed an agreement on the establishment of the joint venture company.

PT BSP will supply crude palm oil (CPO) or other feedstock as basic material to be processed into bio-diesel at the factory, while PT Rekin will provide engineering services and undertake the construction of the factory.

The project will process various kinds of raw materials like CPO and castor oil, so this plant will not rely on one kind of feedstock only in the production of bio-diesel, Ambono said.

A feasibility study on the location of the project and the technology to be applied is currently underway. The factory may be built in Jambi or Batam, Ambono said, adding that the decision is still awaiting the result of the feasibility study.

Triharyo said some US$25 million in investment is required for the construction of the factory which will produce 60,000 - 100,000 tons of bio-diesel annually.

The prospect of the use of bio-diesel as an alternative energy source is quite bright, according to Triharyo. "Indonesia`s diesel oil consumption averages 27 million kiloliters annually, and some nine million kl of which or 30 percent still have to be imported," he said.

The rising demand for bio-diesel as a substitute to diesel oil on the world market has prompted PT BSP and PT Rekin to build a bio-diesel plant in the country and to set up PT Bakrie Rekin Bio-Energy to manage the operation of the plant.

In the European Union, for instance, demand for bio-diesel reached three million tons in 2005, with two million tons or 70 percent of which absorbed by the German market, Triharyo said.

In the first stage, PT Bakrie Rekin Bio-Energy will give priority to the processing of CPO, which is abundantly available in the country. One ton of CPO plus 0.1 ton of methanol will produce one ton of bio-diesel and 0.1 ton of glycerin.

Some countries have processed part of CPO imported from Indonesia into bio-diesel, Triharyo said. "So why not produce it in Indonesia," he said.

He pointed out that 30 percent of the domestic supply of diesel oil is still imported, and the operation of the bio-diesel factory is expected to reduce Indonesia`s diesel oil imports.

Concerning palm oil supply that will support the bio-diesel factory, Ambono explained that some 35,000 tons of fresh oil palm fruits are needed for the production of seven million tons of CPO with an average extraction capacity of 20 percent.

With the assumption that plantation productivity averages 20 tons/ha annually, about 1,750 ha of oil palm plantations are needed to support the operation of the factory, Ambono added.

He also expressed optimism that the investment prospect of the production of bio-diesel is bright, especially in the absence of a subsidy for diesel oil, and even more so now that the price of oil on the world market has reached US$17 per barrel.

Referring to the legal umbrella for the use of bio-diesel as an alternative source of energy, Triharyo cited a decree of the Oil/Gas director general on the standard and specification of diesel oil on the domestic market. The decree allows the application of bio-diesel up to 10 percent of the domestic supply of diesel oil, he said.(*)
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