Aug 10 - Kuwaiti Firm to Help Upgrade Balongan

Source Press
Company PertaminaKuwait Petroleum Corporation 
Tags Refinery Project, Refining & Marketing Activities
Date August 21, 2010

(Jakarta Post) State oil and gas company PT Pertamina and Kuwait Petroleum International Company (KPI) have signed a memorandum of understanding (MoU) to jointly study the possibility of investing in the expansion of  Pertamina’s Balongan fuel refinery in Indramayu, West Java.

The MoU was signed Thursday by KPI president Hussain Esmaiel and Pertamina investment planning and risk management head Feredrick Siahaan.

“The MoU marks the first step in further expanding the existing cooperation between the two companies to new levels,” Pertamina spokesman Mochamad Harun said in a press statement released Friday.

The Balongan refinery currently has a processing capacity of 125,000 barrels of oil per day (bpd). Pertamina expects the expansion project to increase the refinery’s processing capacity by between 200,00 to 300,00 bpd.

Harun said the new refinery would be designed to be integrated with a petrochemical complex in West Java, as well as with other Pertamina downstream business units. The refinery expansion is expected to be completed in 2014.

Pertamina operates five other refineries: the Cilacap refinery with a capacity of 340,000 bpd, Balikpapan (260,000 bpd), Dumai (170,000 bpd), Plaju (110,000 bpd), Balongan and Kasim (10,000 bpd).

Pertamina is confident it can boost fuel production, which is currently lower than national demand. In 2009,  Pertamina’s refineries produced 831,000 bpd of subsidized fuels, while domestic demand for these fuels reached 1.25 million bpd.

Currently, Pertamina has a long list of projects both to expand old plants and to build new refineries. Apart from the Balongan refinery,  Pertamina plans to upgrade its four other refineries in Plaju, Cilacap, Balikpapan and Dumai.

Pertamina is also preparing to build three new refineries in Cilacap (Blue Sky Cilacap Refinery), Banten (Banten Bay Refinery) and East Java (East Java Refinery).

The Blue Sky Cilacap Refinery is expected to be on stream by 2014 with an installed production capacity of 19,000 bpd.

The Banten Bay Refinery is targeted to begin first production in 2015, with a planned installed production capacity of 150,000 bpd. The East Java Refinery is expected to be on stream in 2017 with a planned installed production capacity of 200,000 bpd.

Pertamina’s plan for the refineries has been criticized as too ambitious as the refinery projects only bring small margins, making them unattractive to investors. Pertamina has proposed incentives for the projects and the proposals are being discussed by the Energy and Mineral Resources Ministry and the Finance Ministry.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd