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Pertamina to increase domestic refining production

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, June 16 -- Indonesian lawmakers were told state-owned PT Pertamina has developed a list of downstream projects for completion in the next few years to stop importing state-subsidized fuels.

“We expect that Pertamina’s refineries can produce as much as 1.503 million b/d by 2017,” said the firm’s processing director Rukmi Hadihartini, who acknowledged, “This is still lower than the domestic demand forecast of 1.612 million b/d.”

Rukmi told the Indonesian parliament that, in addition to upgrading and adding new refining capacity, “we expect the development of alternative energy like biofuel and coal liquefaction will cover the shortage.”

She said the firm operates six refineries with an installed capacity of 1.031 million b/d. This year, however, the six are expected to produce just 831,000 b/d of fuels, falling some 400,000 b/d short of the expected domestic demand of 1.253 million b/d.

To close the shortfall and achieve fuel self-sufficiency by 2017, Rukmi said Pertamina would upgrade existing refineries and build new ones.

Upgrades will take place at five refineries:

-- Pertamina expects to complete the revamping of the Plaju refinery’s fluid catalytic cracking unit in 2012. It will increase the refinery capacity to 138,500 b/d from 118,000 b/d.

-- In 2013, Pertamina expects to complete catalytic-cracking unit at the Cilacap refinery. The new RFCC is expected to increase capacity to 410,000 b/d from the current 348,000 b/d. “We are now in the process of selecting contractors for the project,” Rukmi said. “We expect that construction can be started by the end of this year.”

-- Pertamina also will carry out a bottom upgrading project at the Balikpapan refinery, with completion expected in 2014. The upgrade will increase the refinery’s capacity to 300,000 b/d from 260,000 b/d.

-- In 2014, Pertamina expects to complete revamping the crude distillation unit (CDU) at the Dumai refinery, increasing production capacity to 370,000 b/d from 170,000 b/d.

-- Expansion of the Balongan refinery is to be completed by 2014, increasing its production capacity to 325,000 b/d from 125,000 b/d.

Pertamina also plans to build new refineries:

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

-- The Banten Bay Refinery is targeted to begin its first production in 2015, with planned installed production capacity of 150,000 b/d. “We are now conducting a bankable feasibility study of the project. We expect to establish a joint venture company for the project on June 25,” Rukmi said.

-- The East Java Refinery is expected to be on-stream in 2017 with a planned production capacity of 200,000 b/d.

Rukmi said Pertamina is looking for Middle Eastern oil companies to cooperate in construction of the new refineries. “For building new refineries, we need crude supply guarantee for at least 20 years,” she said.

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