DOWNSTREAM: Pertamina plans to export jet fuel in June
... still waiting for permit from the Ministry of Trade
Wednesday, May 27 2009 - 08:56 AM WIB
?We have got an export license from the Ministry of Energy and Mineral Resoures and is waiting for a foreign trade license from the Ministry of Trade,? the company recently said in a statement in its website.
If realized, it will become the first jet fuel exports by Pertamina.
Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Evita Herawati Legowo said last week the ministry had issued a permit for the state owned firm to export its jet fuel products for three months this year.
?Currently, Pertamina has a surplus kerosene output as a result of the kerosene-LPG conversion program. Kerosene?s specifications are more or less similar to those of jet fuel. You need only to reprocess it a bit to turn it into jet fuel. We have recommended Pertamina ask for an export license from the Ministry of Trade after getting assurance that Pertamina has more than enough of the fuel to meet the domestic demand,? Evita said.
Pertamina Integrated Supply Chain?s acting President Director Rusnaedi Johari said last week the firm had clinched a deal with a buyer in Singapore to sell the fuel for two months.
?We shall be able to export between 150,000 and 200,000 barrels of jet fuel each month,? he said.
He refused to name the Singaporean buyer, saying ?unveiling the name of the buyer before shipment is realized is in conflict with contractual ethics?.
Pertamina will seek to extend the contract with the Singaporean buyer. If it efuses, the firm will look for potential buyers in Thailand, Malaysia, China and the Phillippines, he said.
Pertamina will sell the fuel to the Singaporean buyer free on board at international price. ?Currently, jet fuel sells at US$65 per barrel on the international market. The price will change along with the fluctuation of crude price,? he said.
Pertamina used to import jet fuel to meet the domestic demand because its refineries produced less than the national consumption. The firm was actually able to produce more but it was forced to produce kerosene rather than jet fuel to meet the household demand for kerosene. The situation has however changed following the goverment?s program to encourage households nationwide to use liquified peteroleum gas (LPG) rather than kerosene for cooking.
The demand for kerosene has significantly dropped and Pertamina can now produce more jet fuel.
Pertamina has stopped improting jet fuel since March this year.
?Before, we imported two cargoes or around 300,000 barrels of the fuel per month,? Rusnaedi said.
The national consumption of jet fuel now stands at between 1.3 million and 1.4 million tons per month, while Pertamina?s refineries can produce between 1.5 million and 1.6 million tons of the fuel per month.
Pertamina now reprocesses kerosene into jet fuel at its Cilacap, Plaju, Dumai and Balikpapan refineries, the firm says in its website.
The Indonesia National Air Carriers Association (INACA) cautiously welcome the Pertamina jet fuel export plan.
?If they (Pertamina) can now produce jet fuel more than amount needed by the domestic market, that?s fine. We only hope it will not lead to a shortage of supplies on the domestic market . If Pertamina exports the fuel only to get a maximum profit and if it causes a shortage of supply on the domestic market, that means Pertamina has created another problem for the country,? INACA?s Secretary General Tengku Burhanuddin said.
In the past, Pertamina asked for Malaysian firm Petronas to help provide jet fuel for airlines at the Soekarno-Hatta international airport. (Simon Panggabean)