Pertamina to build refinery in Cepu

State oil and gas company Pertamina said it would build refinery with the capacity of between 100,000 to 150,000 barrels per day (BPD) in Cepu, Central Java, which is expected to become on stream in 2006.

?Crude supply for Cepu refinery will come from Exxon Mobil?s oilfield in Cepu, whose crude production capacity would also be around 150,000 BPD in 2006,? said Muchsin Bahar, Pertamina?s downstream director.

Mucshin said the investment needed to build the refinery would be at around US$ 250 million and Pertamina would finance the construction from equity and loan.

?We are very lucky, Cepu?s crude is a very light crude, which means less treatment and therefore relatively low investment to build the refinery,? said Muchsin.

?What we need to do is to build column separator to separate the crude. The lightest side, which account for 60 percent of the crude, will go to TPPI petrochemical complex in Tuban, East Java, while the remaining 40 percent will be treated in cracking facilities in Cepu,? he said.

Pertamina has 15 percent stake in Trans-Pacific Petrochemical Indotama (TPPI) petrochemical complex and is required to supply condensate or condensate-like crude to the plant.

Exxon Mobil?s huge oil reserves was originally planned to be produced starting 2003, but stalled negotiation between Exxon Mobil and Pertamina over the oil block?s contract extension and Pertamina?s equity participation in the block had made the plan delayed to at least 2004. (alex/godang)