Pertamina delays Cilacap refinery expansion

State oil and gas company PT.Pertamina said on Friday it would delay construction of Cilacap refinery expansion to wait for construction materials prices to reach bottom.

CEO Ari Soemarno told reporters that the project?s EPC re-tender might be delayed to late next year. ?We will wait until prices are stabilizing,? he said. He expected construction costs would go down substantially as steel prices, one of the main components for the project, has gone down steeply in the past few months.

Pertamina and Japanese firm Mitsui Corp will team up to modify the refinery, which located in Central Java , in a bid to increase its crude processing capacity to 410,000 barrels per day (bpd) from 348,000 bpd at present.

Pertamina will have a 20 percent stake with Mitsui owning the rest. The project is originally expected to cost the partnership US$1.8 billion.

Pertamina and Mitsui had earlier this year held EPC tender for Cilacap EPC but the tender failed as only Japanese contractor Toyo Engineering Corp. submitted proposal. (godang)