Page 9 - AsianOil Week 21

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SOUTHEAST ASIA
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unblended diesel to fuel importers, allowing the company to run down more quickly diesel stockpiles that have swelled in recent months. The ministry said on April 22 that Pertamina had an excess of 2.4mn kilolitres of diesel.
The NOC noted this week that gasoline con- sumption during the Lebaran (Eid) religious holiday was 17.5% lower than the daily average in the first two months of this year. Daily gasoline consumption averaged 77,140 kilolitres during May 23-25, compared with a daily average of 93,557 kilolitres in January and February 2020, local news outlet Tempo reported.
Indonesia authorities have begun drawing up exit plans for its social distancing measures, with National Planning Minister Suharso Monoarfa having said that a plan is in the works to allow tourist visits to Bali by July.
With plans to restart economic activity, Per- tamina has also returned to its longer-term plans to expand downstream capacity.
The NOC signed a memorandum of under- standing (MoU) with state construction firm Nindya Karya and a South Korean consortium
on May 20 for the $1.5bn Dumai refinery devel- opment project in Riau Province.
“This $1.5bn project would increase the domestic oil and fuel production capacity, which would consequently reduce our dependence on oil imports and trade deficits in the future,” The Jakarta Post quoted Investment Coordinating Board (BKPM) chairman Bahlil Lahadalia as saying.
The Dumai project is one of four capacity expansion projects that fall under the Refinery Development Master Plan (RDMP), with the other three located in Balikpapan, Cilacap in Central Java and Balongan in West Java. The combined capacity of the four projects will expand by 38.2% to 1.21mn bpd.
Pertamina’s Grass Root Refinery programme, meanwhile, aims to build two new complexes with a combined capacity of 600,000 bpd in Tuban in East Java and Bontang in East Kaliman- tan. Around 92% of the 841 hectares (8.41 square km) of land needed for the Tuban project have been acquired so far, local news service Kontan quoted the BKPM as saying on May 28.™
EAST ASIA
China’s leaders urged to ramp up oil storage
POLICY
CHINESE officials are reportedly calling on thegovernmenttorampupcrudeoilstockpil- ing to capitalise on low prices, just days after it emerged that domestic financial investors were doing just that.
Delegates of the National People’s Con- gress (NPC), whose latest session ended on May 28, have urged the State Council to stockpile greater volumes of oil, ICIS reported that day. Members reportedly called for commercial and refinery storage as well as very large crude carriers (VLCCs) to be used in conjunction with the strategic petroleum reserve (SPR).
The extent to which China is able to ramp up its oil imports remains something of a mystery, however. The government last issued an official update on SPR storage lev- els in 2017, while commercial storage levels are unavailable.
Xiamen University energy specialist Lin Boqiang told the Financial Times in April that while Beijing wanted to stock up on cheap oil, government agencies had been slow to approve the ramp-up and that space was limited.
“It’s not possible to get the funds together quickly, to organise transportation, to have a place to store it,” Lin said. “Every country is the
same. They all want to buy, but the actual volume theycanbuyisnotverylarge.”
The last official figure that the government gave for SPR storage levels was 37.73mn tonnes (276.56mn barrels) as of June 30, 2017. National Energy Administration (NEA) head of develop- ment and planning Li Fulong said in September 2019 that the country had around 80 days’ worth of oil in its SPR and commercial stockpiles.
The push from officials for greater oil storage comes after Reuters reported on May 25 that Chinese financial investors were rapidly filling up commercial storages held by the Shanghai futures exchange.
The newswire quoted unnamed sources as saying that the exchange had more than doubled its storage capacity to 57mn bar- rels over the past six weeks in order to meet increased demand from investors. Nevertheless, they added that nearly all existing storage would likely be filled by the end of June.
Sources said companies outside the oil industry were behind the storage drive and been bidding up Shanghai futures since early April. “We call them ‘hermit’ investors,” Reu- ters quoted one unnamed state oil official as saying. “They are hedge funds backed by rich individuals, trading affiliates of brokerages.”™
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