Reva Sasistiya

A worker rides a bicycle between oil drums at Pertamina's fuel distribution center in Jakarta. (Photo: JG)

Pertamina to Cease Imports of Petroleum In 2017 After Refinery Projects Are Completed

Indonesia, Asia’s top diesel and gasoline importer, may be able to stop bringing in refined petroleum products from abroad after 2017, when a number of refinery projects are expected to come onstream, according to a senior official of state oil and gas company PT Pertamina.

Rukmi Hadihartini said the company expected to have built or expanded eight refineries by 2017 to more than double refining capacity to 2.2 million barrels per day from the current 1.03 million.

Pertamina currently operates six refineries. However, this is only enough to supply 70 percent of the domestic demand for petroleum products, with the balance having to be imported.

Rukmi said the first project to start would be the expansion in 2012 of the Plaju refinery in Palembang, which would provide additional refining capacity of 20,500 barrels a day.

This would be followed by the expansion of the Cilacap refinery in Central Java, which would provide an additional 62,000 bpd capacity by 2013.

To develop the project, which will cost $1.5 billion, Pertamina has teamed up with Japan’s Mitsui, which holds an 80 percent stake.

“The Cilacap project … is at the preferred bidder selection stage,” Rukmi said in an interview on Thursday.

The plant, which is the country’s biggest refinery, currently has two crude distillation units with a capacity of 118,000 bpd and 230,000 bpd, respectively, and resumed normal operations on Wednesday after a recent fire. It supplies 34 percent of national demand, and 60 percent of demand in Java.

In 2014, Pertamina will start work on expanding the Balikpapan refinery in East Kalimantan to provide additional capacity of 40,000 bpd.

Rukmi said Pertamina also expected three other refinery projects to be completed in 2014 ­— the revamping of the Dumai refinery in Riau, the construction of a new, low-emissions refinery in Cilacap and the expansion of the Balongan refinery.

He said the Dumai plant would provide additional capacity of 200,000 bpd, the Cilacap project 19,000 bpd and the Balongan refinery in West Java 200,000 bpd.

The next project, Rukmi said, would be a new $7.8 million refinery in Banten on which Pertamina is cooperating with the National Iranian Oil Refining and Distribution Co. (Niordc), with each having a 40 percent stake, and Petrofield Refining of Malaysia, which holds the remainder. The refinery, which is set to start next year, is due for completion in 2015 and will have a capacity of 150,000 bpd.

Rukmi said the consortium had finished the feasibility study and had agreed to give a stake to South Korean conglomerate STX.

The last project, Rukmi said, is a new refinery in East Java with a capacity of 200,000 bpd. He did not specify where the refinery was to be built in the province.

“Although there will still be a gap between supply and demand in 2017, we won’t have to import refined products because we expect all of the government’s alternative energy programs to be up and running by that stage, including the biofuel, coal gasification, and coal liquefaction projects,” Rukmi said.

According to Pertamina figures, national demand for petroleum products will increase by an average of 3.2 percent per year through 2017.

Energy Minister Purnomo Yusgiantoro said in March that the department was searching for ways to persuade private sector investors to build refineries in Indonesia, including offering corporate income tax breaks and lifting taxes on construction input.

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