Pertamina and partners set to increase Cilacap capacity

State oil and gas company PT. Pertamina, SK Lubricants Co., and PT Patra SK have signed a memorandum of understanding (MoU) to conduct a feasibility study to raise production and sale of lubricants from the LOC RU IV plant in Cilacap, Central Java.

The MoU was signed by Pertamina?s Processing Director Chrisna Damayanto, SK Lubricants CEO and President Director Choi Kwan Ho, and Patra SK President Director Dadik Pribadi in Jakarta on Tuesday.

The South Korean firm SK Lubricants is the world?s leading producer of lubricant products which are mostly exported to markets in Asia and Europe.

Patra SK is a joint venture between PT Patra Niaga and SK Energy, which specializes in the production and trading of lube base oil and has a plant in Dumai, Riau.

The three companies will use the feasibility study, which will cover aspects of technique, market, and the economics of the project, as a basis for the increase of the lubricant quality and quantity.

Chrisna said that it will be pursued to meet the rising demand at domestic market, and to fulfill the environmental principles required for such development.

According to him, the planned cooperation is part of Pertamina?s effort to accelerate its expansion in oil downstream sector. ?It?s also a realization of our commitment to increasing Indonesian economy by gaining bigger market shares at domestic and regional markets. This is in line with our vision of becoming a world class energy company and the Champion in Asia by the year 2025,? he said.

After completing the feasibility study, which is expected to last for about six to eight months, the three companies will set up a joint team to make final preparations for the establishment of their joint venture.

Editing by Benget Besalicto Tnb.