Pertamina, Saudi Aramco extend HoA to end December

Pertamina

Indonesia?s state-owned oil and gas firm PT Pertamina and Saudi Aramco have decided to extend the Heads of Agreement (HoA) for the planned US$5 billion Cilacap refinery upgrade project in Central Java to end of this year, Koran Tempo reported.

Pertamina Director of Processing and Petrochemical Megaproject Rachmad Hardadi said that the agreement to extend the HoA, which represents the first step on a path for a binding agreement, was made during a meeting on November 24 as Saudi Aramco has yet to agree on one of the four clauses. He declined to reveal further details. ?We have agreed the HoA to be extended until December 31,? he said.

The HoA was expected to be followed with Pertamina and Saudi Aramco plan setting up a joint venture company for the Cilacap refinery upgrade project. Pertamina is expected to have a 55 percent stake in the joint venture company, while Saudi Aramco the remainders.

Pertamina and Saudi Aramco signed the HoA in November of last year.

The upgrading program will make the Cilacap refinery the largest in the country with improved economic parameters. Its Crude Distillation Unit (CDU) capacity will be increased from 345,000 barrels per day (bpd) to 370,000 bpd, while its complexities will increase from three to nine with production result increasing from 73 percent to 96 percent.

Following the signing of the HoA, Pertamina and Saudi Aramco was expected to carry out site preparation and basic engineering design next year. If the Front End Engineering Design (FEED) is completed in 2017 and EPC starts in 2018, the upgrading project is expected to be completed and start up at the end of 2021.

Editing by Reiner Simanjuntak