Pertamina signs $283m contract for Balongan refinery

The consortium of Indonesian firm PT Rekayasa Industri and Japanese firm Toyo Engineering Corp will build "residue catalic crackers off-gas to propylene project" (ROPP)for the Balongan refinery in West Java owned by state owned oil and gas firm PT Pertamina.

Pertamina and the consortium signed on today (Tuesday) the engineering, procurement, construction and commissioning (EPCC) contract worth US$283 million for the project.

The ROPP would convert off-gas produced at the Balongan refinery into propylene as raw material of plastic, thus incrasing the added value of the refinery, Pertamina's President Director Ari Soemarno said.

The project will increase Balongan's propylene production capacity by 179,000 metric tons per annum.

"The increase in the production capacity aims at fulfilling the rising demand for plastic raw material,? Ari said.

The ROPP, which will be equipped with olefin conversion technology (OCT) of the U.S.' Lummus Global Inc., is expected to start operation in October 2010. (godang)