Pertamina, Adaro sign agreement on fuel storage utilization
Wednesday, May 13 2015 - 04:48 PM WIB
State owned oil and gas firm PT Pertamina has signed an agreement with IDX-listed coal firm PT Adaro Energy Tbk on oil fuel sales and utilization of fuel storage.
Under the agreement effective July 2015, Pertamina will provide Adaro with 500,000 kiloliters of oil fuel per year over a period of 10 years and the volume can be increased to 800,000 kl per year, Dwi Soetjipto, Pertamina?s President Director, told reporters on Wednesday.
The fuel will be either imported by Pertamina or produced from the firm?s refinery in Balikpapan, East Kalimantan, which is not far from Adaro?s mine, Dwi said. Adaro operates a huge coal mine in Tabalong, South Kalimantan.
Besides, Pertamina will lease and operate Adaro?s fuel storage which has a capacity of 72,000 kiloliters. The firm will use it as a base for the delivery of oil fuels to eastern Indonesian region, including coal miners in Kalimantan. Currently, the firm uses its own floating storage for that purpose. Thanks to Adaro?s fuel storage, Pertamina does not need to expand the capacity of the floating storage and thus can save investment.
Minister of Energy and Mineral Resources Sudirman Said welcome the agreement, saying ?With the agreement, Pertamina can now supply oil fuels to Adaro and lease and operate the latter?s fuel storage.?
Adhi Wibowo, Director of Coal Business Oversight at the ministry, concurred, saying other coal companies may follow suit.
?Companies such as KPC, Berau and Kideco, also have huge fuel storages, which they can lease to Pertamina to support fuel distribution in the country, including for mining areas,? Adhi said.
Editing by Johannes Simbolon