PT Kilang Kaltim Continental (KKC), an Indonesian subsidiary of Continental Energy Corp. (CEC), Vancouver, BC, has let a contract to Lone Star Technical Solutions Group (LSTS), League City, Tex., to provide front-end engineering design and other services for a proposed 24,000-b/d modular refinery to be built in two phases at the KIPI Maloy port and industrial park in a special economic zone of the Kutai Timur Regency in East Kalimantan Province, Indonesia.
Alongside providing FEED for the project, LSTS will supervise and insure quality control on KKC’s behalf during fabrication of modular refinery equipment and components at selected manufacturers located within the US, as well as advise KKC and assist with supervision of KKC’s selected construction contractor during the Maloy refinery’s on-site construction and commissioning phases, CEC said.
Neither CEC nor LSTS revealed a value of the contract.
Project background
The contract award to LSTS follows CEC subsidiary PT Continental Hilir Indonesia’s (CHI) late-2017 approval from the East Kalimantan provincial government to move forward with a plan to build and operate the refinery at KIPI Maloy, a new international port and industrial park built within the Maloy Batuta Trans Kalimantan special economic zone, according to Nov. 3, 2017, release form CEC.
Phase 1 of the project is to include construction of a simple 6,000-b/d refinery, an associated 10-Mw electrical power generation plant designed to use heavy fuel oil produced by the refinery, and a tank farm to store crude feedstock as well as refined product.
Targeted for startup in December, the refinery’s $50-million Phase 1 will produce diesel, B30 biodiesel, LPG, naphtha, marine fuel oil, and residual fuel oil for direct sale to industry, distributors, and consumers within the East Kalimantan region.
As part of the Phase-1 development, CEC said it already has arranged an unidentified global oil trader to supply imported crude to the refinery until it can purchase crude feedstock under long-term contracts from local oil producers within East Kalimantan Province.
Scheduled for commissioning by yearend 2020, Phase 2 of the refinery will expand capacity by 18,000 b/d to 24,000 b/d as well as add complex equipment to enable production of gasoline and jet fuel.
CEC said it expects to invest an additional $100 million to complete Phase 2 for a total investment of $150 million for both phases of the project.
Established in January under a foreign direct-investment license received from Badan Koordinasi Penanaman Modal Indonesia—the country’s investment coordinating board—KKC is jointly owned by CEC 80% and CEC’s 85%-owned CHI 20%.
Contact Robert Brelsford at [email protected].
