Tuesday, March 17, 2009

Business,Trade, Oil, Gas, Mining updates from Jakarta

Business, Trade, Oil, Gas & Mining Updates from Indonesia
(Courtesy Joyo News Service)
- Foreign Investors Acquire 8 Indonesian Steel Makers
- Indofarma, Kimia Farma Aim for No. 1 With Merger
- Indonesia's Bank Permata To Get $200 Mln Capital Injection
- Sun Life Indonesia And CIMB To Establish Joint Venture
- Indonesian Eximbank To Open Branch In Singapore
- Citi Financial Indonesia Eyes Larger Share In Small Biz Credit Mkt
- Indonesia's Astra Sedaya Sells Bonds Valued At $81.8 Mln
- Indocement Repays Remaining Debt To Hc Finance Bv
- Indonesian Construction Co Wika To Build Asphalt Plant
- Indonesian Govt Fails To Meet Target To Build Low Cost Apartments
- Indonesian Retail Co Matahari Overshoots Income Target
- Mercedes To Spend $18 Mln On Indonesian Assembling Facility
- Riau Airlines To Buy Three Planes To Boost Its Services
- Indonesian Plantation Co Lonsum Posts 64% Rise In Net Profit
- Indonesia's CPO Exports Forecast To Rise 7% This Year
- Minister Presents PNPM Assistance To Indonesia's S Kalimantan
- Pertamina Won't Lift LPG Price During Indonesian Election Period
- Indonesia may seek other LNG buyers if contracted cargoes dropped
- Senoro LNG Project To Start This Year In Sulawesi
- Damaged Grissik-Singapore Gas Pipeline To Be Fixed This Month
- Pertamina delays shutdown of Cilacap aromatics unit by a week
- Indonesia's Chandra Asri to run cracker at 80% rate in April
- Pertamina Plans To Cut 2Q Gasoline Term Buys -Traders
- Indonesia's PLN Buys Power From Malaysia

Foreign Investors Acquire 8 Indonesian Steel Makers
JAKARTA, March 17 Asia Pulse - Foreign investors have acquired stakes in eight local steel makers facing financial and marketing problem in the past two years. The eight companies have suffered a sharp fall in sales forcing them to operate far below their capacity as low as 50 per cent on weak demand mainly on the domestic market, reports said.
The condition was worse since the last quarter of 2008 when the global financial crisis began to bite, the Indonesia Iron and Steel Industry Association said.
Association chairman Hidayat Triseputro said the market slump has continued through the first quarter of this year. Based on data at the industry ministry, one of the country's largest steel maker PT Gunung Garuda and three subsidiaries, had been acquired by three investors from Singapore at a price of Rp1 trillion (US$90 million).
Metal Asia Group wholly acquired PT Gunung Gahapi Sakti at a price of Rp221.75 billion , Austin Investment Group took over full control of PT Gunung Gahapi Bahara at a price of Rp150 billion and Orientstar Pte Ltd now wholly owns PT Gunung Rajapaksi, which was sold at Rp341.03 billion.
Earlier Tenaris SA, one of the world's largest steel pipe makers, acquired 77.45 per cent of PT Seamless Pipe Indonesia Jaya from the Bakrie Group at a price of US$73.5 million.
The Jakarta Globe
Wednesday, March 18, 2009
Indofarma, Kimia Farma Aim for No. 1 With Merger
Yessar Rosendar & Janeman Latul
In an ambitious plan to eventually become the country’s largest pharmaceutical company, two state-owned enterprises, PT Indofarma Tbk and PT Kimia Farma Tbk, are to merge in the first quarter of 2010, company officials said on Tuesday.
“We expect that the new company will take about 15 percent of the local market,” said Sjamsul Arifin, the president of Kimia Farma. The largest player in the fragmented sector is PT Kalbe Farma Tbk, with sales of Rp 7 trillion ($588 million) in 2007. Combined, the two companies’ 2007 sales would be Rp 3.63 trillion, just over half of Kalbe Farma’s. Iman Rachman, a director of Mandiri Securities, the appraiser for the process, said that it would take about six to nine months to finish the legal framework for the merger before it could go ahead.
Indonesia's Bank Permata To Get $200 Mln Capital Injection
JAKARTA, March 17 Asia Pulse - Indonesia's PT Bank Permata (JSX:BNLI) will get a capital injection of US$200 million from its shareholders PT Astra International (JSX:ASII) and Standard Chartered bank. The publicly listed lender will need fresh fund to strengthen its funding capacity, a bank sources told the newspaper Investor Daily. Astra and Stanchart are finalizing the plan for additional capital to be available before July this year, the sources said.
Meanwhile, Bank Permata corporate secretary Sandi T Mulyana said additional capital is needed anticipating worse impact of the global financial crisis.
Mulyana, who declined to confirm the capital injection report, said the bank is considering three options to strengthen its capital - issuing bonds, launching right issue and seeking banks loans. He denied suggestions that the bank needs capital injection to increase its capital adequacy ratio (CAR) saying the bank still has a safe CAR of 11 per cent well above the minimum limit of 8 per cent.
Sun Life Indonesia And CIMB To Establish Joint Venture
JAKARTA, March 17 Asia Pulse - PT Sun Life FinancialIndonesia, the local unit of Canadian insurance giant Sun Life will spend US$22.5 million to acquire a 49 per cent stake in the local unit of Malaysian conglomerate CIMB Group to further tap into Indonesia's highly potential insurance business. Under an agreement, the two giants will then turn CIMB unit PT Commerce International into a new joint venture called CIMB Sun Life, the newspaper The Jakarta Post said. Sun Life Indonesia President Chris Lossin noted bancassurance penetration has gone from a very low figure six years ago to a very significant portion of the market today, saying it is expected to continue to grow.
Lossin said that over the period of five years, CIMB Sun Life would generate new premiums of around Rp1 trillion (US$84 million) and take about 5 per cent of the country's market share. He pointed out that the vast majority of the people in the
world's fourth most populous country, have not been covered with insurance.
Indonesian Eximbank To Open Branch In Singapore
JAKARTA, March 16 Asia Pulse - The Indonesian export financing agency to be named Indonesian Eximbank, to start operation in June, will set up a branch in Singapore in 2010. Eximbank will be a conversion of state PT Bank Ekspor Indonesia (BEI) and it offer financing service that is not easily handled by commercial banks, BEI president Arifin Indra , who is also be the president of the new bank. Eximbank needs to have a branch in Singapore as the neighboring country is one of the financial centers in Asia, Arifin was quoted as saying by the newspaper Bisnis Indonesia. He said many Indonesian exports and imports have been handled via Singapore, adding exporters and importers could open letter of credit (L/C) at the Singapore branch of Eximbank.
Citi Financial Indonesia Eyes Larger Share In Small Biz Credit
JAKARTA, March 17 Asia Pulse - Citibank Indonesia will expand its Citi Financial networks planning to open four new branches in Solo, Yogyakarta, Lampung and Makassar. The target is to increase the bank's 13 per cent share in small business credit market, the bank Marketing Director Rico Usthavia Frans said. Frans said small business sector has become the main target of all banks at present under the threat of global financial crisis. He said the bank hopes to increase the share to 15 per cent as a result of the operation of the new units of Citi Financial, which now has 55 branches.
Citi Financial has posted an increase of more than 50 per cent in credits averaging more than Rp30 million (US$2520) each, he was quoted as saying by the newspaper Investor Daily.
Indonesia's Astra Sedaya Sells Bonds Valued At $81.8 Mln
JAKARTA, March 16 Asia Pulse - Indonesia's PT Astra Sedaya Finance has sold bonds valued at Rp900 billion (US$81.8 million) larger than earlier estimate of Rp600 billion. The offer had been oversubscribed with demand 1.7 times larger,
Djoni Bunarto Tjondro, the president of the financing subsidiary of PT Astra International said. Astra Sedaya, which offers to finance the purchases of car produced by the Astra Group, will use the fund to strengthen its financing capacity , the newspaper Investor Daily said. The bond will be listed on the Indonesian Stock Exchange on March 27, Djoni was quoted by the paper as saying. The company is set to spend up to Rp9 trillion on financing the purchase of cars estimated to reach 74,000 units this year.
Indocement Repays Remaining Debt To Hc Finance Bv
JAKARTA, March 17 Asia Pulse - Indonesia's second largest cement maker PT Indocement Tunggal Prakarsa (JSX:INTP), said it has repaid its remaining debt of US$50 million to HC Finance BV.
"The company, therefore, needs fresh fund to refinance itself as it had used internal fund to repay the debt last week," corporate secretary Dani Handayani said. Preparations have been made to seek bank loans , Dani said giving no figure. Originally, Indocement had a debt of US$150 million to HC Finance BV, which is its majority 56.14 per cent shareholder, but US$100 million of the debt already repaid last year. Indocement is building a new cement factory in Cirebon, West Java, expected to be operational in the second half of this year. The new factory will increase its annual production capacity to 18.6 million tons from 17 million tons at present, the newspaper Bisnis Indonesia said.
Indonesian Construction Co Wika To Build Asphalt Plant
JAKARTA, Mach 17 Asia Pulse - Indonesian construction company PT Wijaya Karya (Wika) (JSX:WIKA) said it plans to build an asphalt extraction plant with an investment of Rp300 billion (US$25.2 million) by the end of this year. Wika will team up with PT Sarana Karya , which hold an asphalt mining concession, to build the factory on the Buton island off Southeast Sulawesi, Wika secretary Imam Sudiyono said . Wika and Sarana Kaya have agreed to cooperate although no agreement has been signed, Imam said, adding Sarana Karya will provide its mining rights and Wika will handle the marketing of asphalt.
Meanwhile Wika Operation Director Budi Harto said the state company will establish a joint venture with Sarana Karya with a share split of 50 per cent each. Wika will provide a budget of Rp50 billion for the asphalt business this year, Imam was quoted as saying by the newspaper Investor Daily.
Indonesian Govt Fails To Meet Target To Build Low Cost Apartments
JAKARTA, March 17 Asia Pulse - The Indonesian government said it could not carry out its plan to build 60,000 units of low cost apartment houses in five years ending this year on financial problem.
"The government could build only around 30,000 units in 10 cities in the country , State Minister for Public Housing M Yusuf Asyari said. More than Rp6 trillion will be needed to build 60,000 units of apartment houses , but the government could provide only Rp3 trillion (US$252 million)," Yusuf was quoted as saying by the newspaper Investor Daily He said the private sector would not be interested in building low cost apartment houses as it will take at least 5 years to recover the capital . The low cost apartment houses are planned mainly for workers and students in Jakarta, Bandung, Semarang, Yogyakarta, Surabaya, Makassar, Banjarmasin, Palembang, Medan and Batam.
Indonesian Retail Co Matahari Overshoots Income Target
JAKARTA, March 16 Asia Pulse - Publicly traded Indonesian retail company PT Matahari Putra Prima (US$(JSX:MPPA) overshot its income target of Rp11.5 trillion (US$1 billion) to Rp12 trillion in 2008 or an increase of 22.45 per cent from Rp9.8 trillion in the previous year. Company president Benjamin Mailool said this year the company hopes to chalk up further increase of 15 per cent in income. The
company, which has shut down 33 supermarket outlets reducing the number to 27 units in four years , plans to open 10 new outlets of hypermarket this year.
Supermarkets are in a difficult situation as they are dwarfed at higher level by hypermarkets and could not compete in lower level facing mini markets which are closer in location to consumers, a company official said earlier. Mushrooming growth has been recorded in the number of mini markets mainly in residential complexes. Benjamin said the company has set aside Rp600 billion to open the 10 new hypermarket outlets. Currently Matahari has 160 retail outlets including 40 units of hypermarket , the newspaper Investor Daily said.
Mercedes To Spend $18 Mln On Indonesian Assembling Facility
JAKARTA, March 16 Asia Pulse - PT Mercedes Benz Indonesia (MBI) said it will spend Rp200 billion (US$18 million) this year on its Indonesian assembling facility. The sole agent for Mercedes cars will repair its assembling facility for multipurpose vehicle (MPV) in Gunung Putri, Bogor, West Java, an official said. Head of the investment coordinating board (BKPM) Muhammad Lutfi said the German principal Daimler AG plans to make Indonesia production base for new models of luxury MPV products of Mercedes in this region. Daimler wants to win the luxury MPV market in Indonesia so far dominated by Toyota Alphard and Nissan Elgrande, Lutfi said.
Riau Airlines To Buy Three Planes To Boost Its Services
PEKANBARU, March 16 Asia pulse - Riau Airlines (RAL), whose majority shares are owned by the regional government of Riau province, is planning to purchase three RJ 100 planes, Riau Governor HM Rusli Zainal said here on Saturday.
"RAL which is growing rapidly has to increase the number of planes. It therefore will add three more aircraft to increase its services to passengers," the governor said. He said that his side was still considering the sources of the fund that would be used to purchase the aircraft, whether it would be taken from the RAL internal funding sources, from banks or from the regional government. RAL now owns two RJ-100 planes. It serves the Pekanbaru-Jakarta route.
Indonesian Plantation Co Lonsum Posts 64% Rise In Net Profit
JAKARTA, March 16 Asia Pulse - Publicly traded plantation company PT PP London Sumatra Indonesia (JSX:LSIP) posted a 64.4 per cent increase year-on-year in net profit to Rp927.55 billion (US$84 million) in 2008. Sales of the subsidiary of the food giant Indofood Sukses Makmur (JSX:INDF), attributed the increase in net profit to 31.3 per cent rise in sales to Rp3.85 trillion . Based on its financial reports for 2008 issued last weekend the oil palm plantation company recorded a 32.7 per cent increase in operating profit to Rp1.31 trillion , the newspaper Investor Daily said. . When many other companies suffered losses on foreign exchange , the company chalked up a foreign exchange gain of Rp29.96 billion in 2008, up from Rp17.39 billion in the previous year.
Indonesia's CPO Exports Forecast To Rise 7% This Year
JAKARTA, March 17 Asia Pulse - Indonesia's exports of crude palm oil (CPO) and derivatives are forecast to rise by up to 7 per cent to 15.5 million tons this year from 14.1 million tons last year. A chairman of the association of palm oil companies (Gapki) Susanto said demand for palm oil remains strong despite the global recession. Susanto said increases are still expected in demands from India, China and Europe, but demands from the United States are predicted to decline.
A number of factors including soybean production, the price of crude oil and industrial growth in destination countries will determine palm oil demand in the world market , he said. He said the world's production of soybean is on the decline
resulting in an increase in the price of that commodity. The price of CPO has been picking since early this year to reach US%550 per ton at present, he was quoted as saying by the newspaper Bisnis Indonesia.
A decline has also been recorded in the production of CPO by Indonesia and Malaysia, which are the world's largest CPO producers.
Minister Presents PNPM Assistance To Indonesia's S Kalimantan
BANJARMASIN, S Kalimantan, March 16 Asia pulse - The Coordinating Minister for the Indonesian People's Welfare Aburizal Bakrie handed National Self-Reliant Community Empowerment Program (PNPM) assistance worth Rp166.535 billion (US$14 million) to South Kalimantan province here Friday. On the same occasion, Bakrie also inaugurated a number of infrastructure project in South Kalimantan.
The two acts were originally to be performed by President Susilo Bambang Yudhoyono but the President had canceled his working visit to South Kalimantan after suffering a gastric disorder during his working visit in South Sulawesi on Thursday. The president had therefore assigned Bakrie to present the PNPM assistance to South Kalimantan and inaugurate the projects in the province on his behalf. President Yudhoyono for the first time announced the PNPM program at Vatulemo Square in Palu, Central Sulawesi, in April 2007. In South Kalimantan itself, the program was announced by the South Kalimantan governor on June 7, 2007. In 2007, South Kalimantan province received PNPM funds totaling Rp89.203 billion, In 2008, the province was allocated Rp228.368 billion in PNPM funds but in reality received only Rp221.087 billion. For 2009, South Kalimantan's PNPM allocation amounted to Rp166.535 billion for 151 sub districts in 13 districts
municipalities. South Kalimantan also received Rp427.253 billion in smallholder's business credits (KURs) for 28,711 recipients. The infrastructure projects inaugurated by Bakrie on Friday included a drinking water supply system and a low-cost high--rise housing complex.
Pertamina Won't Lift LPG Price During Indonesian Election Period
JAKARTA, March 17 Asia pulse - State-owned oil company Pertamina has promised it will not raise the price of liquefied petroleum gas (LPG) during the period of Indonesia's election this year. "We will maintain the current price of the 12 kg cylinder LPG until the end of the election stages," General Manager for Domestic Gas Affairs of Pertmaina Wahyudin Akbar said here on Tuesday. Pertamina also guaranteed that LPG stocks during the period of election stages will be enough. The government will organize a legislative election on April 9, 2009 and a presidential election on July 8, 2009. The newly elected president is expected to be installed in October 2009. "There is no need for the people to worry about LPG stocks in the market," Akbar said.
At present, Pertamina's LPG stocks reach 200,000 tons, which are enough to meet domestic need for 20 days with an estimated consumption rate of about 7,000 tons per day. The Pertamina policy to maintain the LPG price is in line with the government appeal that Pertamina should not raise 12 kg LPG price this year. Pertamina now sells the 12 kg cylinder LPG at Rp5,750 (US$0.48) per kg or Rp69,000 per cylinder. At the consumers' level the price is at a range of Rp75,000-Rp80,000 per cylinder, depending on their distribution distance.
Indonesia may seek other LNG buyers if contracted cargoes dropped
Jakarta -- Indonesia may divert some contracted LNG cargoes to other buyers if it approves requests from term customers in Japan, Taiwan and South Korea to reduce their shipments in light of sagging demand, senior government officials said Monday. "Diverting the LNG cargoes is one of our options. We may seek LNG buyers currently [for] the idled LNG cargoes," the energy and mines minister Purnomo Yusgiantoro said, adding that the government is still negotiating with the contracted buyers.
"We may seek LNG buyers to sell the idled LNG cargoes to, as the existing buyers have Downward Quantity Tolerance clauses in their term contracts, [allowing them] to request a reduction in term cargoes," the vice president of LNG for state-owned
Pertamina, Hari Karyulianto, said. Pertamina handles Indonesia's LNG exports for Asian buyers. About 12 cargoes are at issue in the current talks, Karyulianto said. Idled cargoes may also be used to meet domestic demand, officials with upstream regulator BPMigas have said.
Senoro LNG Project To Start This Year In Sulawesi
JAKARTA, March 17 Asia Pulse - Indonesia's PT Donggi Senoro LNG (DSL) said it is set to start the process of constructing a liquefied natural gas (LNG) in Donggi Senoro in the regency of Banggai, Central Sulawesi towards the end of this month. DSL hopes to thrash out negotiation on the price of contract for the procurement , engineering and construction (EPC) with Japan Gas Corp. (JGC), an official of state oil and gas company PT Pertamina said. DSL hopes JGC will agree to start work to build the LNG plant with an annual capacity of 2 million tons on EPC price of less than US$1.8 billion, the unnamed official told the newspaper Investor Daily.
DSL is a joint venture company which is 51 per cent owned by Mitsubishi Corp., 29 per cent by Pertamina and 20 per cent by PT Medco LNG Indonesia. The LNG plant is expected to be operational in 2012 to start shipments to Japanese utilities Chubu and Kansai Electric each to have 1 million tons a year under a 15 year contract.
Meanwhile, the government said it will not allow DSL to start construction of the project before it approves its LNG price formula. In addition, Pertamina and Medco need to clarify dispute between DSL and PT LNG Energi Utama over rights to build the project, Energy and Mineral Resources Minister Purnomo Yusgiantoro said.
Damaged Grissik-Singapore Gas Pipeline To Be Fixed This Month
JAKARTA, March 16 Asia Pulse - PT Transportase Gas Indonesia (Transgasindo) said it is set to finish later this month replacing damaged part of its gas transmission pipeline transporting gas to Singapore from Jambi. Around 23 kilometers of the pipes have buckled in the Kuala Tungkal-Panaran section located around 110 kilometer from the Grissik gas field in Jambi causing trouble in gas shipment. The subsidiary of state gas distributor PT Perusahaan Gas Negara (PGN) has to reduce gas shipment to 270 MMscfd from 465 MMscfd normally. The repair will cost around US$200 million being handled by Global Industry Asia Pacific, PGN President Hendi Prio Santoso said. Transgasindo is 60 per cent owned by PGN and 40 per cent by Transasia Pipeline Pvt Ltd, reports said. Transasia Pipeline is a consortium of Conoco Indonesia Holding Lts, Petronas International Corp Ltd, Talisman Transgasindo Ltd and SPC Indo Pipeline Co. Ltd.
Platts Commodity News
March 16, 2009
Pertamina delays shutdown of Cilacap aromatics unit by a week
Singapore -- Indonesia's Pertamina has again delayed the turnaround at its aromatics unit at Cilacap refinery, from March 16 to March 24, a company source said Monday. The unit was originally scheduled to shut down for 12 days at the end of February for repairs to a leaking compressor caused by a fire at the facility on February 19. It was postponed to March 16 and now to March 24 due to difficulties in procuring spare parts for the compressor, the source said. Pertamina hopes to run the aromatics unit at full capacity until July, when it will be shut for 45 days for a catalyst change.
The Cilacap refinery is expected to concentrate on producing aromatics in April, after the company's Balongan refinery increases its operating rates at the end of March. The 125,000 b/d Balongan refinery was running at 50% as of Monday, after
problems at its single-buoy mooring facility, which started in mid-February affected crude supplies, the source said.
The Cilacap aromatics unit can produce 110,000 mt/year of benzene and 270,000 mt/year of paraxylene. Production is currently at full capacity. Most of Pertamina's annual benzene production has been allocated to three domestic term customers -- styrene monomer producer Styrindo Mono Indonesia, linear alkyl benzene producer Unggul Indah Cahaya and maleic anhydride manufacturer Justus Sakti Raya. Its paraxylene term customers include South Korea's SK Energy and Tychem.
Chua Sok Peng, sok_peng_c...@platts.com
Platts Commodity News March 16, 2009
Indonesia's Chandra Asri to run cracker at 80% rate in April
Singapore -- Indonesian petrochemical producer Chandra Asri plans to run its sole naphtha-fed steam cracker at 75-80% of capacity in April, shortly after the cracker restarts from a scheduled turnaround Sunday or Monday, a source close to the company said Tuesday. The steam cracker, with an ethylene production capacity of
600,000 mt/year, was operating at 70% of capacity before the maintenance shutdown on February 1. The company a few weeks ago, bought 55,000 mt of light naphtha for delivery in April at a premium in the "low teens" to the Mean of Platts Japan naphtha assessment on a CFR Anyer basis. With this purchase, the company's requirements are fully covered for April. Chandra Asri will be taking delivery of some term cargoes in May and will only seek spot cargoes "if there are margins," the source said. If margins are squeezed, the company will lower its
steam cracker operations.
Wendy Cheong, wendy_che...@platts.com
Pertamina Plans To Cut 2Q Gasoline Term Buys -Traders
SINGAPORE, March 16 (Dow Jones)--PT Pertamina plans to reduce term gasoline imports in the second quarter due to increasing domestic supply, but may have to pay higher prices as market conditions have improved since late last year, traders said Monday. Indonesia's state-owned energy firm, set to renew its contracts with term suppliers this week, may cut term 88-RON gasoline imports from 3.6 million firm barrels a month in the first quarter to about 3 million barrels, one trader said. The company had planned to keep gasoline output from its own refineries high in the second quarter, having solved earlier problems with its Balongan refinery and delayed planned maintenance at its Cilacap refinery, company officials had said
In late 2008, Pertamina sealed deals for first-quarter supply with Petral, ChinaOil, Unipec, Petronas and Kipco at minus $1.20 a barrel to Singapore quotes for free-on-board Singapore cargoes and around flat for cost-and-freight Indonesia cargoes.But with gasoline consumption in China and the U.S. recovering in the past few months, Pertamina will likely pay higher prices for second-quarter gasoline supply, traders said. Petral, Pertamina's Singapore-based trading unit, which is financially independent from its parent, earlier concluded second-quarter gasoline purchase contracts at discounts of around $0.30 a barrel for free-on-board Singapore cargoes and premiums of up to $1 a barrel for cost-and-freight Indonesian cargoes, a second trader said.
Indonesia's PLN Buys Power From Malaysia
SAJINGAN BESAR, W Kalimantan, March 16 Asia pulse - Indonesian state power company PT PLN planned to expand cooperation with Sarawak Energy Berhard (SEB) in West Kalimantan for interconnection and power purchase. President director of PT PLN Fahmi Mochtar said in Sajingan Besar, Sambas regency, on Sunday that on February 19, 2009, Heads of Agreement between PLN and SEb had been signed under a Sarawak-West Kalimantan interconnection network project.
SEB will supply electricity from the 275 kV system in Serawak to Bengkayang in West Kalimantan in the 2011 to 2012 period, Fahmi Mochtar said when inaugurating a power energy purchase from SEB by PT PLN in West Kalimantan for Sajingan in the Aruk border crossing check point. He said in the initial stage PLN in West Kalimantan will buy 200 kVA of electricity from SEB to serve 380 households in Sajingan Besar subdistrict. PLN will also buy 400 kVA of electricity from SEB for the population in Badau, Badau subdistrict, Kapuas Hulu, on the border region projected to be realized in March 2009.
Fahmi Mochtar said the power purchase from Malaysia in Sajingan Besar was a first in Indonesia, but this type of transaction is often carried out between countries in Southeast Asia such as between Thailand and Laos. PLN also wanted to build an interconnection network in the Asian countries. Three of the 14 interconnection projects concern Indonesia, Mochtar said. They are the Batam - Singapore, Sumatera - Malaysia Peninsula, and West Kalimantan-Sarawak interconnection.
Under the Asean economic cooperation scheme, all the interconnection projects are scheduled for completion in 2015. General Manajer of PLN for West Kalimantan Denny Pranoto said the power purchase from SEB will be increased. For Sajingan Besar it will be increased to 1,000 kVA with the network reaching Galing subdistrict 34 kilometers from Aruk, Denny Pranoto said. Pranoto added that the government had prepared the funding for boosting the capacity from the 2009 State Budget. Four villages will be covered by the power line from Aruk to Galing. "Actually
Galing already received power from PLN in Sambas," Pranoto said. He cited that 500 kVA to 1,000 kVA of electricity will also be supplied to Entikong subdistrict bordering with Tebedu, Sarawak, under a deal and memorandum of understanding (MoU). "Implementation will be in stages according to the capacity of the network," Pranoto said.
Chairman of SEB Datok Abdul Hamid Sepawi meanwhile said the trans-border electricity supply was a great achievement under the PLN-SEB cooperation. Sepawi added that some time in the future there is a possibility that West Kalimantan will supply power to Sarawak. "We know that many parts of Kalimantan are abundant with coal, potential for hydropower plants, or other types of energy to produce electricity," Sepawi said.

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