RI, Iran to build oil refinery

Indonesia, the second smallest oil producer in OPEC, plans to build a refinery with Iran in East Java, as the Southeast Asian nation tries to cut fuel imports and meet domestic demand, Energy and Mineral Resources Minister Purnomo Yusgiantoro said, Bloomberg reported on Saturday.

The refinery will be able to process 300,000 barrels a day of crude oil into fuel, Purnomo said. Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries, will supply oil for the plant, he said.

"I'm flying to Iran soon to finalize the deal," Purnomo told reporters Friday."Iran will supply the crude oil needed because it will be difficult to supply crude oil in the future,"he said.

Indonesia has been planning to build a refinery for the past 10 years. The country has to import a third of its fuel requirements as local refineries, with capacity of 1.055 million barrels a day, can't meet demand.

Indonesia's state oil company, Pertamina, invited Malaysia's Petroliam Nasional Bhd to invest with Iran in a US$1 billion project in the city of Tuban, East Java, said Harry Purnomo, director of downstream affairs at Pertamina on June 14. (*)