Pertamina to build oil refinery in East Java

State oil and gas firm Pertamina plans to build a new oil refinery either in Tuban or Situbondo in East Java to supply fuels to the province.

Pertamina president Baihaki Hakim on Friday said fuels for East Java had so far been supplied from refineries in Balongan, West Java, or Cilacap in Central Java. Therefore, when Balongan refinery was down, fuel supplies to the territory was disrupted and resulted in fuel scarcity.

He said that a consortium of investors from Middle East, Europe and Japan had expressed their readiness to invest in the new oil refinery. However, he said, the Indonesian government insisted to own a certain stake at the oil refinery.

To prevent future disruption in domestic oil supplies, Baihaki also said Pertamina had allocated between US$4 million to $5 million to buy new spare parts for Balongan refinery so that the refinery could operate reliably.

Baihaki acknowledged that there were some problems with Balongan, including the use of out-dated spare parts such as tube catalyst. Some spare parts, for instance, are designed for usage of up to 10 years, but after 5 years in use, they cannot function properly anymore.

Nevertheless, Baihaki said currently Balongan refinery had operated normally, and Pertamina would give more attention to the maintenance of Balongan so that it would run optimally without any disruption. Balongan refinery has been in operation since 1994. (*)