Govt to spend Rp 1t for a refinery project

The government will spend Rp1 trillion for the construction of a new refinery, which would have a total processing capacity of 300,000 bpd of crude oil and would produce not only petroleum but also several petrochemical products.

The fund, to be taken from the 2013 state budget, would be used first to conduct a comprehensive study of the best location and how to get a sustainable supply of crude oil, Evita Herawati Legowo, Director General for Oil and Gas at the Energy and Mineral Resources Ministry, said as reported by The Jakarta Post.

?I have requested the House of Representatives to allocate funds to set up a refinery and the request has been granted,? she said, adding that the refinery was expected to begin operation by 2019 at the latest.

Evita said the government-funded refinery is different than and would not be located in Balongan or Tuban, two locations where two Middle East firms are planning to build a refinery. Kuwait Petroleum is interested in setting up a refinery in Balongan, near the existing refinery, in West Java, while Aramco is currently running a feasibility study for same in Tuban, East Java.

Pertamina currently operates six refineries with a combined capacity of 1.03 million bpd, but they produce only 677,000 bpd of fuel products. The refineries are located in Dumai, Riau, with a capacity of 170,000 bpd, Plaju in South Sumatra (118,000 hpd), Cilacap in Central Java (348,000 bpd), Balikpapan in East Kalimantan (260,000 bpd), Balongan in West Java (125,000 bpd) and Kasim in West Papua (10,000 bpd).(*)