Pertamina warn land speculators

State owned oil and gas firm PT Pertamina said on Tuesday it would use its own lands rather than acquire new plots for new refinery projects that it will develop together with Kuwait Petroleum Corporation and Saudi Aramco Asia Company.

The statement was made by Pertamina?s Vice President Corporation Communication Mohamad Harun in response to rampant land speculation now occurring in Tuban, East Java and Balongan in West Java, which has sent the price of lands in the areas sky high. Pertamina has refineries in both areas.

?We want to inform the public that we shall not buy any new lands for refineries that we are going to build. We shall build refineries on lands that are now under our control,? Harun said.

The prices of lands in both areas have reportedly risen from Rp 65,000 per square meter to Rp 3.6 million ? equal to those of lands in secondary business district in Jakarta -- as the local people strongly believe Pertamina will build its new refineries there.

?It?s not certain yet whether the refineries will be built in East Java or West Java. What is certain is that we shall build the refineries on our own lands,? Harun said.

Harun said Pertamina is very eager to realize the two refinery projects, each with the crude processing capacity of 300,000 barrels per day (bpd), to meet the growing needs of oil fuels in the country.

The firm has signed cooperation agreement with both Middle East-based companies to develop the projects and now they are in the phase of talking with the government over fiscal and non-fiscal incentives for the projects.

At present, Harun said, Pertamina?s refineries have a combined production capacity of 40.6 million kiloliters (kl), while the country?s oil fuel consumption is projected to reach 57.1 million kl. In 2018, the national oil fuel consumption is projected to reach 72.2 million kl. The country thus needs to immediately build refineries in order to reduce dependence on oil fuel imports.

?We have drafted a roadmap for the construction of new refineries and the revamping of the existing refineries. It is expected that the production capacity of Pertamina?s refineries will rise to 66.7 million kl by 2018,? he said.

Editing by Johannes Simbolon