Govt assigns Pertamina to build new refineries

The government has assigned state owned oil and gas firm PT Pertamina to build new refineries, giving it freedom to choose partners and technology for the projects, Director General of Oil and Gas IGN Wiratmaja said.

?The assignment was given to Pertamina in order to speed up the development of the projects,? Wiratmaja said in a statement.

The new refineries should be built in a Public Private Partnership (PPP) scheme and they are expected to be realized in 2019-2020.

He did not specify the number of new refineries which Pertamina is assigned to build, but Pertamina?s officials previously said two or three more refineries need to be built to ensure security of oil fuel supply in the future and are expected to come onstream in 2024.

The refinery is ideally located in Bontang, East Kalimantan. A 300,000 bpd refinery cost Rp 90 trillion to build and the investment will increase to Rp 120 trillion if it is designed not only to produce oil fuels but also petrochemicals.

Crudes for the refineries are expected to come from Iran and Iraq. G-to-G talks have been held by the Indonesian government with the government of both countries. Talk with the Iraqi government has made more progress compared with the one with the Iranian government because the latter is still under the economic embargo of the Western governments.

Editing by Johannes Simbolon