Pertamina, Itochu to conduct refinery joint study
Monday, November 19 2012 - 04:08 AM WIB
State oil and gas company PT Pertamina and Itochu of Japan will cooperate in conducting a joint feasibility study on bottom upgrading of the Balikpapan refinery plant in East Kalimantan.
Pertamina said in a press statement on Monday that both companies signed a memorandum of understanding (MoU) on the implementation of the feasibility study on October 31st of 2012 in Tokyo, Japan.
The feasibility study, which is financed by Itochu, will stand as the basis of management to decide the final investment decision (FID) before starting the construction of the refinery project.
The bottom upgrading of the refinery plant, which will start operation in 2017, is expected to increase the profit margin of Pertamina through the processing of bottom product into oil fuels (BBM) which will be required to meet fuel demand at eastern Indonesia.
Itochu is a Japanese trading and financing company, which has been in cooperation with Pertamina since 1970. The cooperation is mainly on preparing the supply of crude oil for Pertamina?s refinery plants in exchange for its use of the Pertamina?s low-sulfur waxy residue (LSWR) under a long term contract.
Editing by Benget Besalicto Tnb.