Government will build new oil refinery in East Java

Minister of Mines and Energy Susilo Bambang Yudhoyono said that the government planned to build new oil refinery plant in a bid to cope with the shortage of fuel supply in the country.

The minister said that the oil refinery would be built in East Java, with investment of between US$1.5 billion and $2 billion. The new plant which will have a production capacity of about 150,000 barrel per day will be designed to meet fuel demand from eastern Indonesia.

Bambang, however, admitted that the government was still seeking for investors of the planned oil refinery but he hoped businessmen from the Middle East would be interested in the project.

He also said that the foreign investors in the oil refinery plant would cooperate with several local companies including Pertamina and other state firms.

According to the minister, the construction of the new oil refinery plant was necessary to meet the expected sharp increase in the fuel demand in the country because the existing refinery plants in Cilacap, Central Java, Balongan, West Java and Balikpapan, East Kalimantan could no longer be able to meet the demand.

Indonesia has decided to import fuel from neighboring countries to meet the shortage of fuel supply in the country in recent weeks after the Balongan plant had to stop its operation due to technical problem. (*)