Business

Tuesday July 8, 2008

IEV opens CNG plant

By EUGENE MAHALINGAM


Plans to expand operations in Indonesia and Vietnam

PETALING JAYA: IEV Group Sdn Bhd will launch its first compressed natural gas (CNG) plant in Cikarang, Jakarta, on Saturday.

Group chief executive officer Christopher Do said setting up the plant was part of its strategy to provide a “mobile” gas infrastructure for countries within the region.

“In areas where there is no pipeline, you need alternative means to transport gas. Our plant compresses the gas into CNG and we then provide transportation services to end users who have no access to pipeline gas,” he said in an interview.

Do said the group was targeting end-users from the transport, industrial and power sectors in Indonesia.

Christopher Do

“There are more than three million vehicles in Jakarta,” he noted, adding that CNG was a cleaner and cheaper alternative to petrol and diesel.

According to Do, CNG costs just over RM1 per litre in Indonesia, while subsidised petrol costs about RM2.10 per litre (subsidised) and (non-subsidised) over RM3 per litre.

The IEV's plant will be the biggest CNG plant in Indonesia and the only one to be certified by local oil and gas supervising body, MIGAS. The launch would be officiated by the Indonesian Vice-President Jusuf Kalla.

Do said investment cost, which includes plant set-up, related infrastructure and providing transportation services, was around about US$10mil (RM32.7mil).

With a floor size of about 6,000 sq metres, the plant would have a production capacity of 5 million standard cu ft (SCF) per day, which is sufficient to fuel 5,000 taxis, Do said.

He added that IEV had recently signed memoranda of understanding with five Indonesian taxi companies to provide CNG to them for a number of several years.

Do also said that CNG would be a viable option to for many power plants and trains companies in Indonesia, which ran on diesel.

“Unlike Malaysian power plants which operate on gas or coal, most power plants in Indonesia are running on diesel,” he said.

“The railway industry in Indonesia consumes about US$250mil (RM819mil) worth of diesel a year. With the rising fuel prices, they are losing money and are looking for alternative means of energy.”

IEV will be setting up two other plants in Jakarta by year-end.

In Vietnam, IEV has also teamed up with PetroVietnam to set up a power plant with a production capacity of seven million SCF per day.

“Vietnam has limited pipeline infrastructure. Opportunities for the mobile gas market there is enormous,” he said.

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