CNOOC to build 3 biodiesel plants in West Kalimantan

Ika Krismantari, The Jakarta Post, Jakarta

China's largest offshore oil producer by output, CNOOC, plans to build three biodiesel plants in West Kalimantan this year, a government official says.

Evita H. Legowo, an assistant to the energy and mineral resources minister and also the first secretary of the National Biofuel Development Committee, said Sunday the plan was part of the firm's commitment to invest in Indonesia's renewable energy sector following the signing of a memorandum of understanding (MOU) with the government in January.

According to the MOU, the total investment is expected to reach US$5 billion.

The Chinese oil producer was among investors who signed agreements worth $12.2 billion with the government for the development of renewable energy, including biofuel, in early January.

Under the $5 billion deal, CNOOC, which is teaming up with Hong Kong Energy and local company Sinar Mas Resources and Technology, struck the biggest investment value.

"Chinese investors have shown their interest in investing. On Saturday, representatives from Chinese companies came to my office to discuss their plans to invest here," Evita told The Jakarta Post, without further elaboration.

M. Zeet Hamdy Assovie, head of West Kalimantan's Capital Investment Board, told Antara that the three plants would be built in the districts of Sanggau, Sambas and Ketapang.

The province of West Kalimantan, Indonesia's second largest producer of crude palm oil (CPO) -- the major feedstock for biofuel -- boasts 400,000 hectares of palm oil plantations.

Indonesia's palm oil plantations cover 5.5 million ha of land. Indonesia is the world's second largest CPO exporter after Malaysia.

This year, Indonesia, which produces 15-16 tons of CPO each year, is projected to surpass Malaysia by producing 17.1 million tons.

Under the government's biofuel promotion plan, Indonesia will boost its use of biofuels to 5.29 million kiloliters by 2010 and 9.84 million kiloliters by 2015.
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