Pertamina hopes to set up JV with Saudi Aramco end 2016
Tuesday, October 4 2016 - 02:53 PM WIB
State-owned oil and gas company PT Pertamina hopes to be able to set up a joint venture company with Saudi Aramco at the end of this year to realize the planned Cilacap refinery upgrade project.
Pertamina Processing Director Rachmad Hardadi said on Tuesday that the company will continue to hold discussions with Saudi Aramco to help accelerate the setting up of the JV as requested by interim Minister of Energy and Mineral Resources Luhut Panjaitan.
Pertamina and Saudi Aramco have signed a heads of agreement for the planned Cilacap refinery upgrade project in Central Java, in which Pertamina will have a 55 percent stake and the latter 45 percent. Luhut, however, said previously that he had been informed that Saudi Aramco to reduce its stake in the project to 35 percent.
The upgraded Cilacap refinery is expected to be operational in 2022 with an increased production capacity of 370,000 barrels of oil per day (bopd) from 340,000 bopd.
The Cilacap project is part of Pertamina?s Refinery Development Master Plan (RDMP). Under the master plan, Pertamina is set to build several new refineries, including refineries in Bontang, East Kalimantan, and Tuban, East Java. It is also set to upgrade three other existing refineries in Balikpapan, East Kalimantan, Dumai in Riau, and Balongan in West Java.
Saudi Aramco has also expressed interest in upgrading the Dumai and Balongan refineries, but has yet to take concrete steps in that direction.
Saudi Arabia?s King Salman is scheduled to visit Indonesia this month, where the government hopes to further discuss the planned investment by Saudi Aramco in the domestic refinery projects.
Editing by Reiner Simanjuntak