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iversified petrochemical company PT Barito Pacific (BRPT) plans to build a power plant with a generation capacity of 150 megawatts (MW) near its industrial compound in Cilegon, West Java, with an initial investment of around Rp 4 trillion (US$317 million).

BRPT president director Agus Salim Pangestu said the company had not yet decided whether it would build a coal-fired or gas-fired power plant, although the funds had already been allocated for the power project.

'€œThat sum is not our total capital expenditure for this year, but rather just for the power generator,'€ Agus told reporters on the sidelines of a closed meeting with Industry Minister Saleh Husin at his Jakarta office, on Thursday.

Agus said that his company was still conducting a study regarding the kind of generator that it would eventually build. He also said that the firm was still surveying the scale of the project, despite acknowledging that BRPT was leaning toward building a large-scale power plant.

'€œWe want to build a 150-MW facility, but we are also considering going the extra mile to build a large 1,000-MW power plant,'€ said the president director, adding that it was ultimately cheaper to build a large generator in terms of construction costs per MW.

According to his current calculations, the firm would be able to save around 40 percent in operational costs if it chose to build the larger facility.

The president director added that the power generator would be built on land belonging to BRPT'€™s subsidiary, petrochemical giant PT Chandra Asri Petrochemical (CAP), in Cilegon.

He also said that the company was aiming to finish the study soon so that the groundbreaking could commence next year. According to company estimates, the construction will most likely last two or three years, with the plant starting operation by 2019.

Agus said that BRPT might either use the generator to power Chandra Asri'€™s facilities to reduce its annual capital expenditures (capex) and operational expenditures (opex), or sell the electricity output to neighboring businesses.

Barito Pacific, which is controlled by local tycoon Prajogo Pangestu, is currently working on two petrochemical investment projects worth a total of $815 million, which should be completed by 2017.

The first is via Chandra Asri, which has reached a deal with French tire maker Compagnie Financière du Groupe Michelin for a $435 million synthetic rubber plant. The second project also involves the chemical subsidiary expanding the capacity of its naphtha cracker plant in Cilegon.

The firm has yet to report its full year earnings for 2014, but Agus said that it would not stray far from its 2013 results, which were around $2.5 billion.

Meanwhile, the Industry Ministry'€™s director general for industrial manufacturing, Harjanto, said that BRPT should observe the global trend that electric power generation was turning towards sustainable practices.

Harjanto said he hoped that large export-oriented industries like petrochemicals would consider building more sustainable power sources to sustain their facilities. '€œThey have to start thinking in that direction, unless they only plan to supply the domestic market,'€ he said on Thursday.

Barito Pacific is currently engaged in the forestry, petrochemical, property and plantation industry sectors and is further evolving into a fully diversified resource-based enterprise with growing interests in the mining and energy sectors, among other developments.