Pertamina, SK Energy inaugurate lubricant plant in Dumai

State oil and gas company PT Pertamina and its South Korean partner SK Energy officiated on Tuesday the operation of the US$215 million lubricant base oil (LBO) plant in Dumai, Riau province, Detik reported on Tuesday.

The plant was inaugurated by State Minister of State Enterprises Sofyan Djalil along with Pertamina's President Director Ari Soemarno and SK Energy's CEO Shin Heon Cheol.

"We, together with SK Energy, developed the plant as part of our efforts to raise the added value of our products," said Ari.

The new LBO plant will produce Group III base oil, a base stock used to make lubricants, with daily production capacity of 7,500 barrels.

SK Energy signed a joint venture agreement to develop the new LBO plant with Pertamina in April 2006, and the construction of the plant began in November of the same year.

The refinery is projected to raise $400 million in annual revenue.

Actually, the plant has been in operation since May 1, as the construction was completed two months ahead of schedule. It has thus far produced a total of 34,000 tons of lubriancts, including 3,000 tons sold in Jakarta and 31,000 tons exported to Korea, Europe and the US.

The plant is operated by PT Patra SK, a joint venture of Pertamina's subsidiary Patra Niaga (65 percent) and SK Energy (35 percent). (*)