The United Arab Emirates’ (UAE’s) state-owned energy company Abu Dhabi National Oil Company (ADNOC) will team up with state-owned oil and gas company Pertamina to build liquefied petroleum gas (LPG) storage in Indonesia as part of the economic cooperation agreement signed during the visit of the UAE’s prince Syekh Mohammed bin Zayed Al Nahyan to Indonesia on Wednesday.
Indonesia’s Ambassador to the UAE Husin Bagis said Friday that the storage would be built to receive the LPG that would be imported from the Middle Eastern country.
“The LPG storage will be used to store the LPG imported from the UEA. Hence, when Indonesia needs LPG, the country shouldn’t wait for imports for too long,” he said.
Indonesia spends US$3 billion a year on LPG imports to meet 70 percent of its national LPG demand.
However, Husin noted that last year Indonesia suffered a trade deficit of $500 million in its trade with the UAE. Indonesia’s exports to the UAE totaled $1.5 billion last year, while its imports stood at $2 billion.
“Pertamina will need to prepare the location first, while ADNOC is fully ready for this project. They have a lot of money, we should utilize it,” he said, adding UAE investors love brown-field projects.
The ambassador further said the government should work on the issues that have been hampering investment, such as those related to land acquisition.
Besides ADNOC in the downstream sector, the UAE will also invest in the upstream sector through state-owned energy firm Mubadala, which has committed to partner with PT Chandra Asri Petrochemical to build a $2.5 billion-petrochemical plant in Java.
According to a press release from the Energy and Mineral Resources Ministry on Friday, the total planned investment from the UAE in the oil and gas sector stood at $9.7 billion, up to $1.3 billion of which is for investment in the Balikpapan refinery, the integrated supply chain (LPG and Naphta) and LPG storage. (hen)