December 02, 2008

PT Pertamina and NIORDC to halve capacity of planned refinery in Java

Bloomberg reported that PT Pertamina and Iran’s National Iranian Oil Refinery & Distribution Company will halve the capacity of a planned refinery in western Java because of limited crude supply.

Mr Priyo Utomo head of strategic and business development at Pertamina said that the refinery in Banten province will be able to process 150,000 barrels of crude a day compared with an earlier plan of 300,000 barrels a day. The new refinery is expected to help Indonesia cut dependence on imports as crude rose to a record.

It may be noted that Pertamina and National Iranian signed a JV agreement in April 2008 to take a 40% stake each in the project, with Petrofield Refining Co of Malaysia having the remaining 20%.

Mr Utomo said that the venture plans to start building the refinery in 2009 and complete it by 2011. The plant may cost as much as 60% of the USD 7.1 billion required for a 300,000 barrels a day refinery. The partners have hired United Overseas Bank Limited to recalculate the costs for the project.