Pertamina to spend $1 billion to revamp Cilacap refinery

State oil and gas company PT. Pertamina plans to spend US$1 billion to expand capacity of Cilacap refinery in central Java, a company official said on Wednesday.

CEO Arie Soemarno said that the investment would be needed to increase higher prices products such as as gasoline, aviation oil, aromatic and olefin and cut the output of cheap marine fuel oil.

?Pertamina is aiming to increase the refinery?s competitiveness by converting cheap product such as marine fuel oil to more expensive products,? he said. Currently, he said, Cilacap produces some 70,000 BPD of fuel oil. ?Marine fuel oil is even cheaper than crude oil. This condition has caused Cilacap to be non-competitive,? he said.

He said revamping works on Cilacap could commence in 2007 with completion seen in 2009. Currently, he said, Pertamina is in the process of trying to find financing for the project.

Cilacap has capacity of 230,000 BPD. (alex/godang)