Pertamina plans international tender to build two refineries

State-owned oil and gas firm PT Pertamina plans to hold international tender for the development of two fuel refinery projects, reports said on Thursday quoting company President Director Karen Agustiawan.

The plan to hold the international tender came after the Ministry of Finance rejected the request by previous investors Kuwait Petroleum Corporation and Saudi Aramco Asia Company Ltd for government incentives to develop the two projects. The requested incentives including a 30-year tax holiday were deemed to excessive.

Pertamina hopes that through the planned international open tender, the company could garner investors proposing for less incentives. Karen said that Kuwait Petroleum and Saudi Aramco will still be allowed to participate in the tender.

Kuwait Petroleum previously planned to build a refinery in Bontang, East Kalimantan, while Saudi Aramco to develop a similar project in Tuban, East Java.

The Bontang refinery was designed to produce 9.6 million kiloliters of fuel, while the refinery in Tuban 8.29 million kiloliters.

The government also plans to build a new refinery to be financed by the state budget.

Pertamina currently has six refineries, which are located in Dumai, Riau, with a production capacity of 170,000 barrels a day; in Plaju, South Sumatra with a capacity of 118,000 barrels a day; in Cilacap, Central Java, with a capacity of 348,000 barrels a day; in Balikpapan, East Kalimantan, 260,000 barrels a day; in Balongan, West Java, with a capacity of 260,000 barrels a day; and in Kasim, West Papua, with a capacity of 10,000 barrels a day. (*)