Pertamina, Saudi Aramco to boost capacity of Cilacap refinery

State-owned oil and gas firm PT Pertamina and Saudi Aramco have agreed to set up a joint venture that would revitalize and boost the capacity of 39-year old Cilacap refinery in Central Java.

Pertamina President Director Dwi Soetjipto was quoted by Koran Tempo as saying Wednesday that the front end engineering design (FEED) for the Cilacap refinery revitalization project is scheduled to be signed by the two firms on Thursday.

He added that Pertamina will have a 55 percent stake in the joint venture that aims to boost the capacity of the refinery from 348,000 bpd to 460,000 bpd.

The refinery started operation in 1976, and was last repaired in 1999. Dwi said that Pertamina will include the refinery?s assets as its equity participation (equal to about 40 percent), with the remainder to come from overseas loans.

?The refinery will be one of the largest in Asia Pacific,? he said, adding that the US$5.5 billion project will start next year. The Cilacap refinery is currently the 16th largest in Asia Pacific region, and supplies about 34 percent of the country?s fuel consumption.

Elsewhere, Dwi said that once construction is completed, the refinery will process sour crude instead of sweet crude. It will also be equipped with hydrocracker unit to process jet fuel and diesel.

Dwi said that the two firms have yet to reach agreement on the distribution of the refinery?s output, with Pertamina wanting to have the entire production as Aramco already have the privilege to supply 70 percent of the refinery?s crude requirement.(*)