Kuwait Keen to Build $7 billion Oil Refinery in RI to Boost Ties
From Jakarta Post
Kuwait is keen to build a US$7 billion oil refinery in Indonesia, a Kuwaiti diplomat has said.
“The project will be a landmark in our growing strategic relations. In the refinery business, the profits are very small that is why we asked for incentives to cover the costs,” Kuwait Ambassador to Indonesia Nasser Bareh Al Enezi told The Jakarta Post in connection with the double celebrations of Kuwait’s National Day and Liberation Day on Tuesday.
Indonesia is in need of more oil refineries as the capacity of existing aging refineries is only 60 percent of the needed 1.5 million barrels of oil per day (bpd). In 2012, Indonesia spent $42.6 billion on importing oil and gas products.
It has been more than two years but the Indonesian government has not yet decided whether to grant tax or fiscal incentives to Kuwait Petroleum International (KPI) to construct the refinery in Balongan, West Java.
If the project plan is materialized, Kuwait will not only build an oil refinery with a capacity of 300,000 bpd but also build a world class petrochemical plant.
The topic of the oil refinery issue was discussed, Al Enezi said, during a visit of a special envoy, Yusuf Al Ibrahim, to Jakarta.
“The special envoy met with Industry Minister MS Hidayat and conveyed [the Kuwaiti] Emir’s message,” he added.
The special envoy also discussed a newly established $2 billion fund under the framework of Asian Cooperation Development (ACD) to help developing countries achieve the United Nations Millennium Development Goals.
During the ACD’s first summit in Kuwait City last October, Kuwait pledged $300 million for the fund. Kuwait has asked all ACD countries, including Indonesia, to contribute to this fund. The minimum contribution is $1 million.
Indonesia and Kuwait established diplomatic relations in 1968. Last year, two-way trade, for the first time, surpassed the $2 billion-mark. Trade was heavily in favor of Kuwait due to Indonesia’s purchase of $1.8 billion of oil during the first 11 months of 2012. Indonesia exported more than $120 million of paper, cement, furniture, food, rubber, plywood, ceramics, electronic goods and garments.
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