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PT Pupuk Sriwijaya (Pusri), the country's largest fertilizer
producer, is scheduled to sign an agreement with an Iranian
petrochemical company later this week to help bring to fruition its
plan to build a fertilizer plant in Iran.
Iranian ambassador to Indonesia Behrouz Kamalvand said Tuesday that an
agreement would be signed between Pusri and National Petrochemical
Company International for the construction of the plant, which will be
located in Tehran and cost some US$600 million.
Mahmoud R. Radboy, head of the Iranian embassy's economic section, said
that the two companies would have equal participating interests in the
project
"It is agreed that 50 percent of the production will be dedicated to
the Indonesian market and the rest will be sold on the international
market, although it is up to the companies to decide which
international markets they want to serve," Radboy said.
The gas supply will come from the South Pars gas field, which holds 8
percent of total world gas reserves, via a pipeline at a price of $1
per million British thermal units (mmbtu).
"This lower price is based on President Ahmadinejad's promise to build
a solid and good relationship with Indonesia," Radboy said.
Gas prices on the global markets usually range between $3 and $5 per
mmbtu.
The plant is slated for completion in 2009.
Meanwhile, regarding with Iran's offer to supply liquefied natural gas
(LNG) to the soon-to-be-built LNG-receiving terminal in Cilegon, West
Java, Mahmoud said the two governments were still discussing the issue.
"We are still also awaiting the Indonesian government's decision on
establishing a consortium for the project."
State power utility PT PLN, which is the operator of the terminal, said
recently it would seek LNG supplies from Iran, after a previous
agreement for supplies from Qatar collapsed.
PLN director for power generation Ali Herman Ibrahim has said the
company will be looking for some 4 million tons of LNG per year.
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