Pertamina to invest $25b for refinery upgrades

JAKARTA. State-owned oil and gas company Pertamina said on Thursday that it planned to invest up to US$25 billion to upgrade its four main oil refineries across the country to meet increasing demand.

Pertamina processing director Rachmad Hardadi said the upgrades would be carried out in the company’s refineries — in Balikpapan, East Kalimantan; Cilacap, Central Java; Dumai, Riau; and Balongan, West Java — and would run until 2021.

The big project was aimed at meeting the public’s increasing demand for crude oil.

“Indonesia’s consumption reaches 1.6 million barrels of crude oil per day,” Rachmad said.

Hardadi added that Pertamina would team up with strategic partners in the project, with Pertamina becoming the majority stakeholder.

So far, Japanese energy firm JX Nippon Oil and Energy and Saudi Arabian oil company Saudi Aramco have conveyed their interest in joining the project.

In fact, the upgrade of the Balikpapan refinery is set to involve JX Nippon Oil and Energy with Pertamina controlling a 70 percent stake in the project.

The partnership will upgrade the Balikpapan refinery so it can increase its production capacity to 360,000 barrels per day from 260,000 barrels per day.

Pertamina was scheduled to sign an agreement with the Japanese company in November, Rachmad added. (ika)