Page 11 - AsianOil Week 43 2022

AsianOil SOUTHEAST ASIA AsianOil

Russian firm expanding reach in

Indonesia refinery build

POLICY INDONESIA’S national energy firm Pertamina complete sometime in 2024, the current capac-
is understood to be working with a leading Rus- ity of 260,000 bpd at Balikpapan will be raised to
The project is worth sian agency to build a $24bn oil refinery on the around 360,000 bpd, according to sources.
$24bn. central, and most heavily populated, island of Pertamina has in the past gone on record as
Java in the Southeast Asian archipelago. stating its intent to expand the firm’s total capac-
When complete, and fully operational the site ity nationwide to around 1.15 million bpd as
could help increase national refining capacity by early as 2024. At the end of 2021, the firm was
up to 300,000 barrels per day (bpd). processing a total of 1.03mn bpd.
For Pertamina, the refinery is just one of the Government reports in Indonesia have
company’s ongoing projects as it looks to invest also previously stated that Indonesia needs a
up to $50bn in the nation’s refining capabilities refining output of around 1.4mn bpd to meet
during 2023. the demands of a population of 276mn, the
The deal, with Russian firm Rosneft, itself fourth-largest in the world, and the powerhouse
a national energy company headquartered in behind Southeast Asia’s leading economy.
Moscow, will be located in the east of Java near Kilang Pertamina International (KPI), as the
the regional city of Surabaya. refining subsidiary of Pertamina, is now under-
A refinery deal with Russia at the same site stood to be pushing for ground to be broken as
first made headlines in 2016, then seen as a soon as next autumn, with a date for completion
breakthrough after over two decades of frosty targeting 2027, although no plans have been
relations in which no Russian investment in confirmed.
refinery infrastructure was put in place. When complete, the terms of the agreement
Little has been achieved in the years since, will see Pertamina own a 55% stake in the refin-
however. This has been largely the result of the ery, with Rosneft holding the remaining 45%.
coronavirus (COVID-19) pandemic, which has To date, however, KPI is still on the lookout
claimed almost 160,000 lives across Indonesia. for a contractor to take on the engineering, pro-
As a result, engineering blueprints, designed curement and construction (EPC) of the site.
by Spanish firm Tecnicas Reunidas, were not Addressing the issue of the new refinery,
finalised until this August. KPI president Taufik Aditiyawarman said:
When complete, the refinery will take up “Once completed, we’re hoping the refinery will
around 140 hectares of land in the mostly rural increase our crude refining capacity by 300,000
Tuban Regency area, and is expected to be fitted bpd.”
with a total of 14 refining units to process vehicu- The announcement of the deal comes at a
lar fuels in addition to seven more units set aside time when much of the Western world continues
for petrochemical processing. to shun deals with Russia, although some leading
In addition to the Pertamina-Rosneft deal in economies in South and Southeast Asia have, on
Tuban Regency, it is understood the Indonesian paper at least, adopted a neutral stance regarding
state-owned entity is also working to increase Russia’s invasion of Ukraine.
capacity at a number of its other refineries. At As a result, the Rosneft deal is thus being
present, Pertamina operates seven major refin- seen by some in the region as Moscow reward-
eries across the country. ing Indonesia for Jakarta choosing not to ally
Expansion plans are thought to include the with the US or European nations by imposing
Balikpapan Refinery in the province of East anti-Russian sanctions; a concept neither side is
Kalimantan on the island of Borneo. When likely to state publicly. ™

Week 43 31•October•2022 www. NEWSBASE .com P11