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Pertamina Appoints Adhi to Build Cracking Unit
Francezka Nangoy | September 18, 2011

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State construction company Adhi Karya has been awarded a contract to lead a group in building a $931 million oil refinery for state-owned oil producer Pertamina later this month.

Adhi and Gold Star of South Korea won the engineering, procurement and construction contract to build a residue fluid catalytic cracking plant in Cilacap, Central Java.

The refinery — which will convert oil and its residual components into lighter, higher-value products such as gasoline and liquefied petroleum gas — will have a production capacity of 62,000 barrels per stream day.

Adhi plans to start construction by the end of the month, following the signing ceremony on Sept. 27. The project is scheduled to be completed in 39 months, Adhi’s corporate secretary Kurnadi Gularso said on Sunday.

Kurnadi said that Pertamina could expect to see a more efficient production process in oil processing once the RFCC refinery began operations. It could help the government save fuel subsidy money, which makes up a large portion of government spending.

The project is part of Adhi’s plan through 2016 to strengthen its engineering contract services, which contributed 16 percent of its first-half revenue of Rp 1.83 trillion ($208.62 million). Construction accounted for 82 percent of revenue.

Adhi’s other business is property development.

Work on the Cilacap project will consist of procuring necessary materials and human resources for the facility, completing construction and installing necessary equipment.

Kurnadi said that the company expected to gain valuable experience in the construction of oil and gas facilities by collaborating with Gold Star, a global construction contractor that has been involved in large oil and gas projects.

Kurnadi pointed to the Ruwais plant in the United Arab Emirates as an example of a refinery built by Goldstar.

It is one of the largest RFCC plants in the world with a capacity of 127,000 bpsd, or about double the Cilacap plant’s expected capacity.

Adhi was unchanged at Friday’s close at Rp 590 on the Indonesia Stock Exchange. Its shares have lost 35 percent this year, compared to the benchmark Jakarta Composite Index’s 3.6 per cent gain.