China, Kuwait firms seen as potential partner for Pertamina in Bontang refinery project

Petromindo|Lucky

Two firms each from China and Kuwait are seen to be leading candidates to become strategic partner of Indonesia?s state-owned oil and gas firm PT Pertamina in the planned development of the Bontang oil refinery project.

Deputy Minister of Energy and Mineral Resources Arcandra Tahar said on Monday that the two firms were considered as the most serious among dozens of companies which have expressed interest in the project as the two fulfilled the administrative requirements and their offer were seen as competitive.

?All can make offer. The two (firms from China and Kuwait) made competitive offer. The other companies did not fulfill certain requirements,? he said, but did not disclose the names of the two companies and details of their offer.

Arcandra said that the government wants Pertamina to have small stake in the Bontang refinery project, but must retain operatorship control, so as not to disrupt the financial condition of the start firm as it is also engaged in a number of other refinery development and expansion projects.

Dozens of companies were reportedly to have participated in the Bontang refinery project expose held in February by Pertamina in a bid to seek strategic partner for the Bontang grass root refinery project in East Kalimantan Province.

Pertamina has set four criteria in selecting partner for the project including solid track record in the oil refinery industry particularly in terms of operation and project execution; able to adjust to the business model and structure preferred by Pertamina; possesses strong will to complete the project in 2023; and provide additional value for the Bontang refinery project.

Pertamina said in February it hoped to be able to select the strategic partner for the Bontang refinery project in April of this year, to be followed with setting up a joint venture and conduct bankable feasibility study which is targeted to be completed early 2018.

The planned Bontang refinery project will have a capacity of around 300,000 bpd. In the initial phase, Pertamina aims to have a 5-25 percent stake in the project, with an option to increase the stake in the future.

The strategic partner is expected to play a role in providing the required crude and financing, and also has ability to market fuel products that are not absorbed by the domestic market to countries such as Australia, Papua New Guinea, New Zealand and the Philippines.

Pertamina has previously formed partnership with Russia?s Rosneft Oil Company to develop the Tuban refinery project in East Java, and with Saudi Aramco in the expansion of the Cilacap refinery in Central Java. (*)