Indonesia to sign billions of dollars of energy and trade deals in Abu Dhabi

JAKARTA: Indonesian President Joko Widodo will oversee the signing of $18.8 billion (Dh69.04 billion) worth of energy and trade deals on a visit to Abu Dhabi, including Pertamina’s deal with Abu Dhabi National Oil Co to upgrade a West Java refinery, ministers said on Tuesday.

Some of the deals have been under discussions for some time, while others, such as Pertamina’s purchase of LPG from ADNOC, are new.

Widodo will witness the signings this weekend on his first overseas trip of the year, following an official visit by Abu Dhabi Crown Prince Shaikh Mohammad Bin Zayed Al Nahyan to Indonesia in July.

Widodo, whose second term in office began in October, is keen to attract more foreign investors to help create jobs and boost growth in Southeast Asia’s largest economy.

Around a dozen agreements will be completed during the Abu Dhabi trip, Luhut Pandjaitan, an Indonesian minister, told reporters, adding the total value was $18.8 billion.

Among ready agreements was Indonesian state energy firm Pertamina’s deal with ADNOC to upgrade a refinery in Balongan, West Java, said Budi Gunadi Sadikin, deputy minister of state-owned enterprises.

Pertamina will also sign a deal to buy between 170,000 tonnes and 520,000 tonnes of liquefied petroleum gas from ADNOC, he said.

Mubadala Investment Company is also expected to invest in Pertamina’s expansion of its Balikpapan refinery in East Kalimantan, Sadikin added.

Sripeni Inten Cahyani, a director at Indonesia’s state power utility Perusahaan Listrik Negara (PLN), said her firm would sign a power purchase agreement with renewable energy firm Masdar from a 145 megawatt floating photovoltaic power plant the two companies are building in Cirata, West Java.

PLN will pay 5.8 cents per kilowatt hour generated by the power plant for 25 years, beginning when the plant becomes operational in 2022, she said.

Indonesia’s state mining holding company Inalum will sign a memorandum of understanding with Emirates Global Aluminium on a pilot project to increase Inalum’s production capacity, a company spokesman said.

Indonesian and UAE companies signed agreements worth a total of $9.7 billion during Shaikh Mohammed’s visit to Indonesia last year.