Pertamina wins loan to expand Balongan refinery

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Jan. 12 -- A consortium of international banks has committed to provide Indonesia's state-owned PT Pertamina with $225 million financing, enabling it to build a polypropylene unit at its 125,000 b/d refinery in Balongan, West Java.

"The deal is for project financing," said Pertamina finance director Ferederick Siahaan, who added that Japan's Nippon Export & Investment Insurance (Nexi) would act as guarantor for the project.

In addition to Nexi, Ferederick said the consortium is comprised of a number of banks, including HSBC Holdings PLC, BNP Paribas SA, and Sumitomo Mitsui Banking Corp.

Pertamina last year announced plans to build the unit.

"The prospects for the polypropylene market are good," said Pertamina chief Ari Soemarno in May. "That is why we plan to build a polypropylene unit to meet domestic demand [for] plastic.

"We are seeking a partner," Ari said, adding that the new unit would turn Balongan's propylene into polypropylene to increase its value, while another company official said the plant would cost about $200 million and would have a production capacity of 200,000 tonnes/year.

In January 2008, Pertamina signed a contract with Japan's Toyo Engineering and Indonesia's Rekayasa Industri for an expansion project aimed at upgrading the refinery's residue catalyst cracking unit to switch from ethylene output to propylene.

Meanwhile, this month, officials expected the Balongan refinery, which has been shut since last October, to resume operations by Jan. 9. According to Pertamina Vice-Pres. Anang Rizkani Noor, "Everything is smooth and on schedule."

Pertamina shut the refinery on Oct. 18 to upgrade the RCC unit, and 10 days later, there was an explosion at the refinery's 58,000 b/d atmospheric hydrodemetalization unit. The refinery was restarted Dec. 17 but was shut again Dec. 21 due to what officials called "technical problems."

Contact Eric Watkins at hippalus@yahoo.com.

Related Articles

Flint Hills settles Port Arthur pollution case

03/20/2014 Flint Hills Resources (FHR) has reached a settlement with the US federal government to implement innovative technologies to control harmful air pol...

WoodMac: Global ethylene demand, production on the rise

03/20/2014 Ethylene-producing assets that have access to low-cost natural gas feedstocks, such as the ones in North America, will lead the competition in glob...

Earthquake shutters Japanese refinery

03/14/2014 An early-morning earthquake off the island of Kyushu, Japan, on Mar. 14 has resulted in an emergency shutdown of Idemitsu Kosan Co. Ltd.’s Tokuyama...

Fire hits Israeli petrochemical plant

03/11/2014 Gadiv Petrochemicals Industries Ltd., a wholly owned subsidiary of Oil Refineries Ltd. (Bazan), currently is evaluating impacts from a fire that br...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected