Govt plant to build eight mini oil refineries

JAKARTA. The Indonesian government is planning to build eight mini oil refineries with a combined capacity of 10,000 barrels per day to meet the need for diesel oil which is still imported.

The mini oil refineries will be built in North Sumatra, Panjang Malaka Strait, Riau, Jambi, South Sumatra, South Kalimantan, North Kalimantan and Maluku, Director of Oil and Gas Development Program Agus Cahyono Adi said in a statement released on Friday.

"Tenders will be floated for the construction of the oil refineries for corporate bodies to apply," he said.

The mini oil refinery in North Sumatra will be built near Blok Rantau and Pangkalan Susu, he said.

The oil refinery in Panjang Malaka Strait will be built near Blok Emo Malacca Strait and Petroselat, the oil refinery in Riau near Blok Tonga, Siak, Pendalian, Langgak, and West Area, and the oil refinery in Jambi near Blok Palmerah, Mengoepeh Lemang, and Karang Agung.

Meanwhile, the oil refinery in South Sumatra will be built around Blok Merangin III and Ariodamar, the oil refinery in South Kalimantan around Blok Tanjung, the oil refinery in North Kalimantan near Blok Bunyu Sembakung, Mamburungun and Pamusian Juwata, and the oil refinery in Maluku around Blok Oseil and Bula.

"The oil refineries will only produce diesel oil because its production process is more simple than that involved in producing premium gasoline," he said.

He said the other reason behind the construction of the mini oil refineries near the oil wells is the cost efficiency factor, particularly when it comes to transportation of crude oil to the oil refineries.