Kreasindo Resources plans integrated oil, gas industry in East Java

Business tycoon Bambang Trihatmodjo, son of former president Soeharto, and founder of Bimantara Group, is planning to develop an integrated oil and gas industry in Situbondo, East Java, Kontan reported on Monday.

The paper said that through Kreasindo Resources Indonesia, Bambang plans to build an oil refinery, LNG and LPG plants, and a 730 MW power plant on a 600-hectare land in Situbondo.

The paper quoted President Director of Kreasindo Rudy Rajab as saying that the planned oil refinery will have a capacity of 150,000 bpd with projected investment of US$5 billion.

He said that the refinery project will involve three parties including businessman Wisnu Suhardono, who is also President Director of PT Sutubondo Refinery Indonesia, as owner of the land, Kreasindo as the developer, and National Iranian Oil Refining & Distribution Company, which will supply the required crude for 20 years.

Rudy said that the three parties will set up a consortium called PT Kilanindo Golden Star, which has already submitted all the requirements for the refinery investment to the Investment Coordinating Board (BKPM).

China Construction Bank will finance 70 percent of the investment requirement, while the remainder 30 percent to be covered by Kreasindo (70%) and Iran (30%). Kreasindo plans to seek loans from banks in Hong Kong.

Construction of the planned refinery project is expected to start in the second semester of 2018, with completion projected in 2021. Output from the refinery will be sold to state-owned oil and gas firm PT Pertamina. Rudy declined to provide details about the other projects.

Meanwhile, Pertamina Vice President for Corporate Communications Wianda Pusponegoro said she has no knowledge about the cooperation between Pertamina and Kreasindo. (*)