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Pertamina Kicks Off $1.4b Refinery Upgrade
Jakarta Globe | December 29, 2011

President Susilo Bambang Yudhoyono, at podium, inaugurated a $1.4 billion upgrade project at a Pertamina oil refinery in Cilacap, West Java, on Wednesday. (Antara Photo) President Susilo Bambang Yudhoyono, at podium, inaugurated a $1.4 billion upgrade project at a Pertamina oil refinery in Cilacap, West Java, on Wednesday. (Antara Photo)
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Pertamina, the state-controlled Indonesian oil and gas company, has begun a $1.4 billion project to upgrade an oil refinery in Cilacap, Central Java, with President Susilo Bambang Yudhoyono inaugurating the project’s groundbreaking on Wednesday.

The company is upgrading its refinery into a residual fluid catalytic cracking plant that can convert crude oil and its residual components into higher-value products such as gasoline, liquefied petroleum gas and propylene.

The refinery, which can currently process 348,000 barrels of crude oil per day, will be able to process an extra 62,000 barrels a day after the upgrade.

“Refineries are an important chain of Pertamina’s downstream sector business,” Karen Agustiawan, Pertamina’s president director, said in a speech. She added that the refinery’s “commercial operation is expected [to begin] by the end of 2014.”

“More than that,” she said, “Pertamina’s refineries play a vital role in the nation’s energy security.”

Pertamina has six refineries with a total processing capacity of one million barrels per day, and the company produces 41 million kiloliters of gasoline per year.

However, the nation’s fuel consumption has reached 56 million kiloliters of gasoline per year and is expected to increase at an annual average rate of 4 percent. Indonesia must import oil products to fill in the production gap.

The Cilacap refinery produces 3.8 million kiloliters of gasoline every year. The upgrade will boost the refinery’s annual production by 1.9 million kiloliters.

State construction firm Adhi Karya and Goldstar of South Korea won an engineering procurement contract worth $931 million to lead the refinery upgrade project.