JAKARTA — Indonesian sovereign wealth fund Danantara plans to sign an $8 billion engineering, procurement and construction contract with US engineering firm KBR Inc to build 17 modular refineries, according to two sources familiar with the matter and an official economic ministry presentation seen by Reuters.
The contract is part of last week’s trade pact between Indonesia and the United States that led to a reduction in the threatened US proposed tariff rate to 19 percent from 32 percent.
Indonesian Economic Minister Airlangga Hartarto, the chief negotiator of the deal, disclosed the modular refinery plan during a closed-door briefing to Indonesian business leaders on Monday evening. Two sources confirmed the planned deal was mentioned in a presentation that Reuters also reviewed.
Danantara and KBR Inc, formerly known as Kellogg Brown & Root, did not immediately respond to requests for comment. No further details were given on the proposed agreement.
While some details of the trade deal between the United States and Indonesia have been made public, such as increased purchases of US energy, agriculture and commercial aircraft, the proposed contract for refineries has not previously been reported.
Daya Anagata Nusantara – better known as Danantara – controls over $900 billion worth of assets and is part of an ambitious plan to grow the $1.5 trillion economy at a rate of 8 percent compared to the current 5 percent.
Also mentioned in the presentation was a potential $2 billion “strategic” investment to develop blue ammonia in US state Louisiana, by Indonesian chemical and textile group Indorama. But, the presentation added, the project needs tax credits to become feasible.
US President Donald Trump said last week that Indonesia would buy 50 aircraft from Boeing as part of the deal.
The presentation put the total value of aviation sector deals with American companies at $14.4 billion.
The potential deals between Indonesia and US could reach $34 billion, the presentation showed, underscoring the all-out push by Jakarta to become one of the first countries in the world to clinch a deal with Washington.
