Pertamina, Itochu, Star Energy sign MoC for Balikpapan refinery upgrade

Sate-owned oil, gas firm PT Pertamina signed on Monday a Memorandum of Commitment (MoC) with Star Energy of the United Arab Emirates and Japan's Itochu Corp. to jointly upgrade the former's Balikpapan refinery in East Kalimantan.

?Cooperating with world class companies is crucial if we are to make swift progress in upgrading our existing refining capacity. This will ensure better security of energy supply for Indonesia.

"We are delighted to have such strong partners in Star Energy and Itochu and look forward to concluding our discussions on the Cooperation Agreement so this project can begin in a timely way,? Pertamina?s President Director Karen Agustiawan said in a statement on the firm's website.

The MoC was a "reconfirmation" of the commitment signed by three firms in September 2008 to expand Balikpapan refinery capacity, Pertamina's Processing Director Rukmi Hadihartini told Petromindo.com.,

Under the September 2008 commitment, Balikpapan's processing capacity will be increased to 280,000 BPD from 260,000 BPD. At the time, the three parties also agreed to switch Balikpapan's feedstock from sweet crude to sour one in a bid to cut costs. They were also considering adding a 50,000 bpd cracking unit in the refinery to process heavy residue to jack up gasoline and petrochemical output.(godang)