Pertamina to build two refineries in Bontang

State owned oil and gas company PT Pertamina will likely select Bontang in East Kalimantan as the location for the company?s two oil refineries due to availability of land in the regency, Investor Daily reported on Thursday.

East Kalimantan governor Awang Farouk said in Bontang on Wednesday that he was informed by President Susilo Bambang Yudhoyono during a recent meeting that Bontang would be selected as the location for Pertamina?s new oil refineries.

He said that the local government will appropriate a 540-hectare plot of land in Bontang as the location of Pertamina?s refineries. ?We will also add another 1,000 hectares in Marang Kayu for expansion,? Awang said.

Pertamina previously planned to build a refinery in Banten, and another one in Tuban, East Java. However, the oil and gas company later decided to move the location to East Kalimantan due to land acquisition problems. The two refineries will have capacity of 300,000 barrels per day, each.

Awang, however, said that the final decision had not yet been made because the government had not yet decided on fiscal incentives for the construction and operation of the refineries.

Pertamina earlier said that it would cooperate with Saudi Aramco Asia Company Limited (SAAC) and Kuwait Petroleum Company in building the two refineries. Pertamina has asked for a number of financial incentives from the government for the development of the two refineries but the finance ministry only provided fiscal incentives only in the form of duty and income tax exemption.(*)