Refinery upgrading will increase national competitiveness: Pertamina

State owned oil and gas firm PT Pertamina said on Friday the refinery upgrading projects which will be kicked off by the firm will raise the competiveness of the national of Pertamina?s refineries.

Late last year, the firm signed Memorandums of Understanding (MOUs) with global firms Saudi Aramco, Sinopec and JX Nippon to upgrade its refineries under the so-called Refining Development Masterplan Program (RDMP).

Achmad Fathoni Machmud, Vice President for Strategic Planning, Business Development and Operation Risk at Pertamina?s Refinery Directorate, said in the statement that once the RDMP has been completed, Pertamina?s refineries will be able to process sour crude with high sulphuric content, which is cheaper than the type of crude ? light crude ? which is now used by the refineries as feedstock.

With sour crude as feedstock, the refineries will also bring more products, he said.

?Thus far, Pertamina?s refineries use light crude as feedstock, which is relatively more expensive. Once the RDMP has been completed, the refineries will be able to process sour crude, which is cheaper. Thanks to better margin, Pertamina?s refineries will be the most competitive in Asia-Pacific,? he said.

The RDMP aims to double Pertamina?s refining capacity from 820,000 bpd at present to 1.68 millon bpd. The refineries will be able to refine crude with a sulphur content of up to 2 percent, while at present they are only able to refine crude with a maximum sulphur content of 0.2 percent.

Thanks to the high complexity of technology to be used in the refineries, they will be able to more than double their production ? from 620,000 bpd at present to 1.52 million bpd. The products they will produce are of high quality, complying with the Euro IV standards.

Meanwhile, Budi Santoso Syarif, VP of Refining Technology at Pertamina?s Refining Directorate, explained that Pertamina?s refineries were designed between 1920s-1990s to refine locally-produced crudes, which are mostly of light type. They produce products that meet the local needs, namely Premium gasoline, kerosene and diesel.

Pertamina earlier said the RDMP projects will cost Pertamina US$25 billion in ten years.

Under the MoUs signed with the three global firms, Pertamina would team up with Saudi Aramco for the upgrade and capacity expansion of the Dumai, Cilacap and Balongan refineries, located in Riau, Central Java and West Java respectively; with China Petroleum & Chemical Corp for the Plaju refinery in South Sumatra; and with JX Nippon Oil & Energy Corp for the Balikpapan refinery in East Kalimantan.

Editing by Johannes Simbolon