Pertamina will go ahead with Tuban oil refinery project

State owned oil and gas company Pertamina will go ahead with its plan to build an oil refinery plant in Tuban, East Java despite the withdrawal of Hi-Tech International Group of Saudi Arabia from the project, Bisnis Indonesia reported on Tuesday.

Pertamina?s president director Baihaki Hakim said in Nusa Dua, Bali on Monday that the investment for the project would be much lower than the US$2 billion initially planned. "The cost for the infrastructure could be reduced because the project will be built within the complex of PT Trans Pacific Petrochemical Indotama (TPPI)," he added.

He said that the construction of the refinery plant which would process 100,000 barrels per day of oil that would be taken from ExxonMobil?s Cepu field in Central Java could be reduced to US$250 million because infrastructure facilities such as roads had been built by PT Trans Pacific.

He said that the low sulfur wax residual (LSWR) fuel that would be produced from the new refinery plant would be supplied to Trans Pacific as a feedstock. "The synergy with Trans Pacific which is 15 percent owned by Pertamina is quite good," he added.

Baihaki said that Pertamina decided to go alone in the construction of the refinery plant because there were uncertainties about the involvement of Hi-Tech International Group which had initially been committed to jointly developing the project.

He acknowledged that many companies faced difficulties to raise funds following the terrorist attack against the World Trade Center in New York in September 11. (*)