INDONESIA - Sonatrach Offers Majority Stake In Petrochemicals Unit.

Algeria's state-owned petroleum company Sonatrach has invited international firms to take a 51-99% majority stake in its subsidiary Entreprise Nationale d'Industrie Petrochimique (ENIP) following the collapse in mid-2006 of plans to rehabilitate the country's petrochemicals sector (see survey of Algeria in the current volume's Nos. 5-8).

Three groups submitted technical bids in late February to the majority stake in ENIP, 100% owned by Holding Raffinage, Chimie & Hydrocarbures. They are: TSS Projects & Industries of India with Stone & Webster (S&W), part of the Shaw Group of the US; the local Almet with Daelim Industrial Co. of South Korea; and Sojitz of Japan with a Malaysian contracting company. The three were now to enter technical negotiations with Sonatrach, which are expected to take two-to-three months, before the submission of commercial bids.

The successful bidder will take over the rehabilitation of ENIP-owned plants at Skikda and Arzew which have long been producing below capacity. ENIP in June 2005 awarded a contract to S&W to revamp the 120,000 tons/year ethylene unit at Skikda and the 100,000 t/y Arzew methanol plant, but the project collapsed in mid-2006. The Skikda ethylene complex also produces 40,000 t/y of vinyl chloride monomer (VCM), 35,000 t/y of polyvinyl chloride (PVC), 48,000 t/y of low-density polyethylene (LDPE) and 10,000 t/y of hydrochloric acid (HCA). Aromatics units at the complex have a capacity of 90,000 t/y of benzene, 5,000 t/y of toluene, 247,000 t/y of xylene and 38,000 t/y of paraxylenes (see down7AlgPetchFeb12-07).

Jakarta Now Against High Oil/LNG Prices & Gas Cartel: Having become a net oil importer and seen its LNG exports decline considerably in view of rapidly rising domestic demand for natural gas, the Indonesian government is no longer keen on high crude oil and LNG prices. It is not keen on an OPEC-like cartel for natural gas exporting states.

Indonesia's Governor for OPEC Maizar Rahman, who is also head of the board of directors of the state-owned petroleum company Pertamina, on Feb. 13 said Jakarta was unlikely to support the idea of a cartel comprising the world's top natural gas producers. He said: "I don't know what's the goal [to form a gas cartel]. Our gas is already sold on long-term contracts".

Rahman said gas-exporting states such as Indonesia and Qatar were already meeting regularly to exchange information on gas "technology". His comments echoed the scepticism shown earlier by Indonesia's Minister of Energy and Mineral Resources, Purnomo Yusgiantoro, over the feasibility of Russia and Iran's recent expression of interest in forming a "gas OPEC".

Russian President Vladimir Putin and Qatari Emir Shaikh Hamad bin Khalifa al-Thani on Feb. 12 said at a meeting in Doha they wanted competing gas producers to co-operate more. Putin said he would send a team of experts to a natural gas conference in Doha in April, where they would discuss details of building a cartel.