Construction of two refineries to start next year

The government aims to accelerate the development of two crude refineries with construction expected to start next year, acting Director General of Oil and Gas IGN Wiratmadja said.

Wiratmadja said in a statement obtained Thursday that the two refineries included the Bontang refinery in East Kalimantan with a capacity of 300,000 bpd, and a planned 150,000 bpd-capacity refinery to be built by Middle East investors in Java.

He said that ground-breaking for the two projects are scheduled for next year.

He said that the planned refinery in Java is expected to be completed in 2018, adding that Middle East crude producers have made a 20-year supply commitment for the refinery under a G-to-G arrangement, thus providing a price discount for the refinery project. He did not say when the Bontang refinery will be completed.

Indonesia?s refineries currently have a combined capacity of 1.12 million bpd, with the country?s crude output that can be processed by the refineries stands at 649,00 bpd, while domestic fuel demand reaches 1.23 million bpd, leaving a fuel deficit of about 600,000 bpd, according to the directorate general of oil and gas.

Editing by Reiner Simanjuntak