Pertamina terminates East Java refinery JV plan with Hitech

State oil and gas company Pertamina said on Tuesday that it had terminated joint venture plan agreement with Hi-Tech Corp. of Saudi Arabia to build 1500,000 BPD refinery in Tuban East Java after the latter failed to fulfill its commitment.

Pertamina?s downstream director Muchsin Bahar declined to reveal the detail of termination decision, but an industry source told Petromindo.Com that the reason was because Hitech did not show financing capability to carry on with the project as it failed to complete the project?s feasibility study.

On June 2001, Pertamina and Hitech signed a memorandum of understanding to build the US$ 1.3 billion refinery, where the former would assume minority interest.

The crude feed for the refinery is initially planned to be supplied from ExxonMobil?s oil field in Cepu, East Java, which would commence production in 2003.

Muchsin said Pertamina is currently mulling to proceed with the project on its own.

?This should be a profitable project. We can get crude supply from ExxonMobil?s Cepu field too feed East Java consumers,? he said. (alex/godang)