Total to open five gas stations in 2007

Ika Krismantari, The Jakarta Post, Jakarta

Following in the footsteps of Shell and Petronas, Total E&P Indonesie -- the local affiliate of the world's second largest LNG producer, Total SA, is to build five gas stations selling high-quality fuels in Greater Jakarta this year.

The overall investment is expected to amount to US$5 million.

Corporate communications manager Ananda Idris said that the company was currently arranging all the permits and licenses needed to operate the gas stations.

"We are in the process of getting permission from the Downstream Oil and Gas Regulatory Agency (BPH Migas)," Ananda said Wednesday. "But the target is this year."

However, Ananda did not say from where Total would get the gas supplies for the new filling stations, or where precisely they would be located.

These latest five gas stations will intensify the competition in the gasoline retail business in Indonesia, with Total going head-to-head with the three existing players in the market -- state oil and gas firm Pertamina, Shell Indonesia (the local arm of Royal Dutch Shell Plc.), and Malaysian state oil and gas firm Petroliam Nasional Berhad (Petronas).

The government finally allowed foreign and local companies to enter the retail fuel market in December 2005, after revoking Pertamina's monopoly on the retail fuel business. However, Pertamina still has a monopoly over the sale of subsidized fuels.

Currently, Pertamina and its agents operate about 3,000 gas stations throughout Indonesia, while Shell, the first foreign company to enter the retail gasoline market here, now has four gas stations.

Petronas currently operates only two gas stations, located in Cibubur, East Jakarta, and Bekasi, east of Jakarta, but plans to open 21 more stations in Jakarta and its surrounding areas, including Bogor, Tangerang, Depok and Bekasi, this year.

The Malaysian firm is optimistic that by the first quarter of 2011, it will have 200 gas stations across Java, Sumatra, Kalimantan and some areas of eastern Indonesia, with the overall investment expected to amount to $200 million.

Indonesia, with a population of some 220 million people, represents an attractive market for gas retailers as motor vehicles account for almost half of the national consumption of oil, which stands at some 60 million kiloliters per year.
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