Indo Kilang suspends mini refinery project
Wednesday, August 3 2016 - 06:25 AM WIB
The news portal quoted Indo Kilang President Director Bun Sentoso as saying the company has decided to halt the refinery construction after reaching 18 percent progress.
?It?s impossible for us to continue without crude (supply certainty),? he said.
The portal said that Indo Kilang initially expected to get crude supply from PT EMP Tonga. But due to concerns over crude supply certainty, the company have sought for other sources including Pertamina Hulu Energi Siak, Pacific Oil, and other producers, but have not been able to secure the required crude supply.
The delay in the mini refinery project has affected the company?s finances as it has to pay interest on bank loans it used to finance the project.
Indo Kilang has tried to discuss the problem with upstream oil and gas authority SKK Migas, but has yet to produce results. SKK Migas Public Relations manager Taslim Z. Yunus questioned whether Indo Kilang has obtained the necessary permit for the project.
Meanwhile, Director for Downstream Management at the Ministry of Energy and Mineral Resources Setyorini Tri Hutami said that Indo Kilang has obtained temporary permit for construction of the mini refinery.
Regarding crude supply, Rini said that it would have to be temporarily dealt by the company with the crude producers through a business to business arrangement until the government completes designing the planned eight clusters for mini refineries in the country, by which time the government would help arrange the crude supply for refineries in the clusters. She said that ministry is still in the process of drafting regulation for the allocation of crude for the mini refineries.
The government has offered project to build mini refineries, each with a capacity of up to 10,000 bpd, in eight clusters, located near marginal oil fields. The eight clusters are North Sumatra (Cluster 1), Selat Panjang Malaka (Cluster 2), Riau (Cluster 3), Jambi (Cluster 4), South Sumatra (Cluster 5), South Kalimantan (Cluster 6), North Kalimantan (Cluster 7) and Maluku (Cluster 8).(*)