MOCIE Minister Lee Stops By Indonesia
- KEPCO seeks to push a $500s mil. power project in Indonesia

Cooperation on energy between South Korea and Indonesia is likely to develop further with Minister of Commerce, Industry and Energy Lee Hee-beom making a visit to Jakarta Oct.8 on a leg of his tour with President Roh Moo-hyun to Attend the ASEM meeting in Vietnam.

Minister Lee met with Indonesia's Energy and Mineral Resources Minister Purnomo Yusgiantoro in Bali for discussion on cooperation on energy and mineral resources development between Korea and Indonesia. They agreed to set up a channel for dialogue between Korean business firms and their Indonesia counterparts at a meeting of the resources cooperation committee of the two Asian nations.

South Korea established the energy cooperation committee with 10 nations with the one with Indonesia being the first one set up in 1979.

Minister Lee in a meeting with the Indonesian minister discussed the need for stable oil prices and the cooperation in the energy area between Korea and Indonesia. Purnomo is chairman of the OPEC.

The two ministers agreed that high oil prices are harmful to the world economy, hurtful to both oil producing  and oil consuming countries. Minister Lee asked the Indonesia minister to do all he can to bring down oil prices to the level agreeable to both oil producing and consuming countries.

The Korean official also asked Purnomo  for his help imports of LNG from Indonesia by POSCO and SK Corp. would go smoothly. He also asked Purnomo's help for the Korean National Oil Corp.'s move to participate in the exploration of oil in Indonesia's NEM III mining block. KNOC is in the process of making a joint bid with Petro China for the right to explore oil in the NEM III block.

Following the meeting of the resources cooperation committee, Minister Lee and Purnomo attended the business dialogue held between Indonesian and Korean companies for closer cooperation in the energy and mineral fields between those companies on a private level, furthering the cooperation in the energy field between the two countries. Korean companies doing business in the Southeast Asian country included Samtan, Daewoo International and E1, among others.

The resources cooperation committee has had a significant result in that it held a deep discussion on the construction of a combined cycle thermal power plant in Indonesia by the Korea Electric Power Corp.(KEPCO) and the Korea utility company would receive 3 million tons of LNG. The power plant would cost around $500 million for KEPCO, which will use the power plant as its base for expanding into Southeast Asia, while Indonesia would have eased its power shortages, exported LNG, and induced foreign capital in what turned out to be a win-win deal for both sides.

In the presence of the two cabinet ministers, the Korea Mining Promotion Corp. and Daewoo International signed a memorandum of understanding with Wahana Baratama Mine for exploration of coal in Kalimantan, Indonesia. Korean companies expect to ship 5 million tons of coal annually to home from this mining operation, the second one following Samtan's Pasir coal mine in the Southeast Asian country.

The 21st resources cooperation committee meeting participated in by 80 government officials and private business leaders from both countries discussed expanded cooperation in energy and mineral resources development on a private level in a detailed way to go about achieving it.

The Indonesian side proposed increased shipment of LNG to Korea, and expanded cooperation in oil and natural gas exploration, with the hope that joint projects in the area of nuclear power plant construction and other power development would be finalized successfully.

The Korean side requested Indonesia's continued support for projects undertaken by Korean firms including the Pasir mining project, the natural gas liquid project, in which E1 Co. and the Indonesia National Oil Co. have agreed to invest $100 million to produce 30.6 million tons of LPG from 2008.

Korea invested a total of $950 million resources development projects, about 15 percent of total investment in energy resources development overseas over 13 projects, making Indonesia, the top recipient of Korean overseas investment in energy resources overseas.

Minister Lee visited  the Pasir coal mine, which produces 15 million tons of bituminous coal annually and Samtan already earned $700 million from its investment totaling $3.3 million. The mine employs 3,000 workers.   nw