Govt prepares four areas for new refineries

By Febry Silaban

Government will prepare lands in four locations for investors interested to build refineries under a new presidential regulation to be issued as part of President Joko Widodo?s newly-launched First Phase Economic Policy Package.

"The oil refineries will be built in East Kalimantan (Bontang), East Java, West Java and Aceh," said Director General of Oil and Gas at Ministry of Energy and Mineral Resources IGN Wiratmaja Puja.

He said the construction of the four refineries with a total capacity of 668.000 barrels per day is expected to take 10 years. The total investment for the project is estimated to US$23.6 billion. All the refineries will be integrated with petrochemical production plant, according to Wiratmaja.

Under the new presidential regulation, he said, the construction of the four refineries will use public and private partnership scheme, in which state owned oil and gas firm PT Pertamina (Persero) will act as offtaker.

"To encourage the investment, government will also provide tax incentives such as tax holiday, tax allowance, exemption of value added tax and duty," he said, adding that there were many countries and big companies that have expressed interest and sent letters to the Ministry of Energy and Mineral Resources even to the president.

Editing by Johannes Simbolon