Pertamina, Mitsui in talks to upgrade Balongan refinery
Tuesday, April 30 2002 - 11:44 PM WIB
Under the deal, Mitsui would finance the construction of catalytic reformers at Balongan and in turn have an offtake agreement for low sulfur waxy residue.
"Once the current offtake agreement with BP, due to expire end of 2002, is over, and if negotiations with Mitsui are successful, then Pertamina would ink an offtake deal with Mitsui as part of the arrangement to finance the Balongan reformers," a Pertamina source was quoted as saying by Platts on Tuesday.
The construction of reformers at Balongan and the 348,000 BPD Cilacap refineries would increase Pertamina's reformate capacity. Reformate is a high octane gasoline component.
Indonesia effective July 1, 2001, banned the sale of leaded gasoline in and around the Jakarta region.
The move to introduce unleaded gasoline is part of the government's Blue Sky program. This program aims to introduce environment friendly fuels in Java in 2002 and throughout Indonesia in 2003.
To date, Indonesia has not announced any plans to lower sulfur content in gasoil. Plans to introduce unleaded gasoline throughout Indonesia are not likely to meet the existing timetable because of insufficient domestic production.
Pertamina hopes to be able to meet the country's unleaded gasoline requirements only by 2004.
"It takes about 18-24 months to build the reformers, thus it is unlikely Pertamina will be able to meet Blue Sky's timetable," said a company source. (*)