Pertamina plans $25 billion revamp of Indonesian refineries
PT Pertamina (Persoro) has entered agreements with Saudi Aramco, JX Nippon Oil & Energy Corp., and China Petroleum & Chemical Corp. (Sinopec) to undertake a 10-year, $25 billion plan to modernize five of Pertamina’s Indonesian refineries as part of an initiative to ensure long-term energy security for the country.
Pertamina signed a memorandum of understanding with its three strategic partners in a Dec. 10 ceremony in Jakarta, the state-owned company said.
The MOU follows an extended search by Pertamina for investment partners in its Refining Development Master Plan (RDMP), which aims to optimize the operational capability of Indonesia’s aging refineries by equipping them with enough flexible processing capacity to meet the country’s growing demand for petroleum-derived products and reduce its dependence on foreign imports.
As part of the agreement, Pertamina will work with Aramco to develop and evaluate investment options for three refineries, included the 170,000-b/d Dumai facility in Riau, the 348,000-b/d Cilacap facility in Central Java, and the 125,000-b/d Balongan facility in West Java.
Sinopec will collaborate in upgrading plans for the 118,000-b/d Plaju refinery in South Sumatra, while JX Nippon will work with the company to modernize the 260,000-b/d Balikpapan refinery in East Kalimantan, Pertamina said.
Once completed, the expansion and upgrading projects would double the company’s crude oil processing capacity to 1.68 million b/d from its current 820,000 b/d, Pertamina said.
With the MOU now signed, Pertamina and its strategic partners will form a joint team to evaluate the feasibility of the various projects, as well as develop financial and marketing plans to support the overall investment into RDMP.
Front-end engineering and design for all of the projects involved in RDMP is scheduled to be concluded during 2015-16, Pertamina said.
Should the expansion and upgrading program advance as scheduled under the current MOU, the final phase of RDMP would be completed in 2025.
In addition to lifting the Nelson Complexity Index of the refineries, Pertamina said RDMP projects collectively would increase production yields from the plants by:
• Increasing gasoline output to 630,000 b/d from a current 190,000 b/d.
• Increasing diesel production to 770,000 b/d from 320,000 b/d.
• Increasing aviation fuel output to 120,000 b/d from 50,000 b/d.
The refineries also would increase their output of polyethylene, propylene, polypropylene, and paraxylene as a result of RDMP, Pertamina said.
First announced in 2013, RDMP specifically intends to equip the five refineries to process heavier, less expensive crude oils in order to improve their economic performance (OGJ Online, Oct. 7, 2013).
The US Trade and Development Agency previously awarded a $1 million grant to Pertamina to fund a feasibility study on the refinery modernization plan to help the state-owned company “determine and prioritize where investments should be made to increase feedstock flexibility, improve the capability to process higher sulfur crudes, and produce needed fuels to meet future product and environmental requirements (OGJ Online, Aug. 30, 2013).”
