NEW PRODUCTS PIPELINE EYED FOR EAST JAVA

Nov. 8, 1993
North American Nippon Technologies Corp. (Nantco), Vancouver, B.C., has filed an expression of interest with Indonesia's Pertamina to participate in the construction, ownership, and operation of a major petroleum products pipeline in Java. The 1,200 km pipeline will serve eastern Java. Estimated cost is $600 million (Canadian). It will replace eastern Java's existing products supply system and be designed to carry in batches a range of refined products, including gasoline, kerosine,

North American Nippon Technologies Corp. (Nantco), Vancouver, B.C., has filed an expression of interest with Indonesia's Pertamina to participate in the construction, ownership, and operation of a major petroleum products pipeline in Java.

The 1,200 km pipeline will serve eastern Java. Estimated cost is $600 million (Canadian).

It will replace eastern Java's existing products supply system and be designed to carry in batches a range of refined products, including gasoline, kerosine, diesel, aviation fuels, and fuel oil.

The pipeline will connect a new marine terminal with eight tank farms and include three main booster stations and several pumping facilities, Nantco said.

WHAT'S AHEAD

Nantco said it expects Pertamina to express its interest in the project via a letter of intent, then Nantco will submit a formal proposal and commission a comprehensive feasibility study.

Nantco expects to complete the feasibility study and project financing by early 1995 and let construction contracts that spring. Construction is projected to start in summer 1995, with project completion 2 years later.

Plans include forming an Indonesian joint venture company that will be owned in part by Nantco. The joint venture company will own the pipeline and lease it to Pertamina for about 20 years. The system then will be transferred to Pertamina.

Nantco is assembling a management, engineering, procurement, and construction team for the project that so far includes finance group KPMG Peat Marwick Thorne, engineering procurement and construction management firm Monenco AGRA Inc., and pipeline construction company Midwest Management (1987) Ltd.

Nantco said other companies will be invited to join the group.

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