TPPI to process government?s portion of crude, condensate output
Friday, October 11 2013 - 01:28 AM WIB
The refinery started commercial operation in 2006, but has been suspended since December 2011 due to the debt problem plaguing TPPI, the management of which was later handed over to state-owned oil and gas firm PT Pertamina.
Upstream oil and gas authority SKK Migas Acting Chairman J. Widjonarko said that the refinery, located in Tuban, East Java, will soon resume operation, allowing the country?s crude and condensate output belonging to the government to be processed at home. Pertamina refineries do not have the specifications to process the particular output.
Widjonarko said that since TPPI is now under the management of Pertamina, the government?s crude and condensate output could be handed over for refining process to the TPPI refinery facility, which has a capacity of 100,000 barrels per day. In return, TPPI will obtain fees for the service, which will help raise funds to repay its debts.
The crude and condensate output belonging to the government is about 5 percent of the country?s total production. Widjonarko, however, said that not all of the output belonging to the government can be processed at TPPI refinery as particular output from Gresik and Belanak contain mercury. Therefore, this particular output would sold to traders via tender to be held by SKK Migas.
?Therefore, the transfer of the authority in selling the crude from SKK Migas to Pertamina has been cancelled,? Widjonarko said as quoted by Kontan daily.
Minister of Energy and Mineral Resources Jero Wacik said last month that the government was considering to transfer the authority in selling the government?s crude and condensate output from SKK Migas to Pertamina following the high profile bribery scandal involving the now suspended SKK Migas Chairman Rudi Rubiandini. (*)