JAKARTA (RambuEnergy.com) – Continental Energy Corporation (OTCQB:CPPXF) said it has established an Indonesian subsidiary, PT Kilang Kaltim Continental (KKC), under a foreign direct investment license received from BKPM, the agency responsible for coordinating international investments.
KKC’s investment license permits it to build, own, and operate a crude oil refinery at the KIPI Maloy port and industrial park, a special economic zone located in the Kutai Timur Regency of East Kalimantan Province, Indonesia.
In November last year, the company through its Indonesian subsidiary PT Continental Hilir Indonesia received the in-principal approval of the Governor of the Indonesian province of East Kalimantan for the construction and operation of a crude oil refinery to be built at KIPI Maloy located in the Kutai Timur Regency of East Kalimantan.
The approval includes the Company’s plan for the Phase-1 construction of a simple refinery of 6,000 barrels of crude oil per day capacity; plus an associated 10MW electrical power generation facility utilizing heavy fuel oil produced by the refinery, and a tank farm for crude oil feedstock and refined product storage.
The Phase-1 refinery will produce diesel fuel, B30 biodiesel, LPG, naphtha, marine fuel oil, and residual fuel oil for local sale direct to industry, distributors, and consumers within the East Kalimantan region.
During Phase-1, the Company has made arrangements with an internationally recognized oil trader to supply imported crude oil to the refinery, until such time as crude oil feedstock can be purchased under long term contracts from local oil producers within the East Kalimantan Province
The company expects that the total investment for Phase-1 to be US$50 million and targets end of December 2018 for commissioning and delivering of first refined products.
Pre-fabricated modular refinery units sourced from the USA, and erected on site, are expected to provide a fast track to realization of the project in accordance with the Indonesian “KLIK” national policy for facilitating capital investments that involve expedited construction schedules.
Phase-2 of the company’s plan will increase the capacity of the refinery to 24,000 barrels per day and add complex equipment to permit the production of automotive gasoline and jet fuel.
Phase-2 is expected to increase the total project investment to US$ 150 Million and produce first refined products by the end of 2020.
KIPI Maloy is a new international port and industrial park built within the Maloy Batuta Trans Kalimantan special economic zone (the KEK-MBTK). The KEK-MBTK is one of eight special economic zones established by the Indonesian federal government to provide comprehensive facilities to domestic and foreign investors.
The KEK-MBTK was built by, and is directly administered by, the regional governments of East Kalimantan Province and of Kutai Timur Regency. Investors in the KEK-MBTK enjoy special licensing procedures and fiscal incentives, including beneficial import and export terms for international trade.
The company intends to build, own, and operate the KIPI Maloy refinery through PT Kilang Kaltim Continental, a special purpose Indonesian corporation established for foreign direct investment.
The Company is in discussion with several interested financial partners, project funding sources, and lenders located in Indonesia, Dubai, and the USA.
The company owns an 80% shareholding in KKC, and the Company’s 85% owned Indonesian subsidiary, PT Continental Hilir Indonesia, owns the remaining 20%.
Company director, Karsani Aulia, has been appointed as the first director of KKC, and the Company’s CEO, Richard L. McAdoo has been appointed as KKC’s first commissioner. (*)