Government reaffirms Pertamina?s role in Bontang refinery project

Petromindo

The government has reaffirmed its earlier decision assigning state-owned oil and gas firm PT Pertamina to develop the planned Bontang oil refinery project in East Kalimantan Province.

This was said by Deputy Minister of Energy and Mineral Resources Arcandra Tahar in a statement issued on Friday following consultation meeting with Coordinating Minister for the Economy Darmin Nasution and State Minister of State Owned Enterprises Rini Soemarno.

Arcandra said that the two ministers have advised that as long as Pertamina has the required financing capacity to carry out the Bontang refinery project, it should be assigned to the state firm to help accelerate the project.

The government has earlier assigned Pertamina to develop the estimated US$14 billion refinery project. But Arcandra said recently that the ministry was considering an alternative plan of giving the Bontang project to private investors to help accelerate the project and amid fears that the financing capacity of the state firm has been quite stretched as it has also been assigned to develop the giant Tuban refinery project in East Java in partnership with Russia?s Rosneft.

The government is pushing to develop new refineries and expand existing refineries to help reduce fuel import. Existing refineries currently have combined capacity of 800,000 bpd, while domestic fuel consumption stands at around 1.6 million bpd.

Pertamina Director for Processing and Perochemical Megaproject, Rachmad Hardadi said in October that the company is capable of developing the 300,000 bpd Bontang refinery project, and can complete it sooner.

He said that the company will seek a partner in the project, and the selection of a partner for the project is targeted to be completed end of next year, so that construction can start in 2019 in the hope that it can be completed in 2023.

Editing by Reiner Simanjuntak