Feasibility study on new state-owned refinery to be completed this year

The Ministry of Energy and Mineral Resources has targeted the feasibility study (FS) on a multi-billion dollar refinery project owned by the government to be completed later this year.

The FS which is estimated to cost Rp 17 billion is to be carried out by state owned oil and gas firm PT Pertamina.

?Pertamina has been assigned to handle the FS on the grounds that the firm will operate the refinery,? Director General of Oil and Gas Eddy Hermantoro told reporters on Tuesday during the Idul Fitri celebration gathering.

Once the FS is completed, the front end engineering design (FEED) will be carried out next year. The refinery is expected to start operation in 2017.

He said Indonesia urgently needs a new refinery in view of the fact that Indonesia continues to import 400,000 barrels of oil fuels per day to meet the domestic needs. The new refinery, which will be financed using Rp 90 trillion or around US$9 billion of state budget, will have the capacity of 300,000 barrels per day. The crude is expected to be imported from Iraq.

The new refinery will not only produce oil fuels but also aromatic products to obtain ?economic value?.

Some foreign investors have voiced interest to build refineries in Indonesia over the past several years, but none of the projects have made real progress due to ?obstacles related to incentives demanded by the investors from the government?, according to Eddy.

Editing by Johannes Simbolon