The government decided not to change the scheme for the construction of a new oil refinery in Bontang, East Kalimantan. According to the President Director of PT Pertamina Dwi Soetjipto, the New Grass Root Refinery (NGRR) project will continue to use the Government and Business Entity Cooperation (PPP) scheme. Dwi said Pertamina would implement the government's decision. Pertamina takes on the role of supervising the project, which is targeted for completion by 2023.
The investment for the oil processing installation with a capacity of 300 thousand Barrel Per Day (BPD) is estimated to reach US$ 10 billion. The Director-General for Oil and Gas at the Ministry of Energy and Mineral Resources, I Gusti Nyoman Wiratmaja, said that if it was carried out with the PPP scheme, the time for the construction of the refinery could be increased by two to three years. On November 8, Pertamina's Director of Processing and Petrochemical Megaprojects, Rachmad Hardadi, said Pertamina had received an assignment from the government to work on the Bontang refinery.
Orally, the Bontang refinery has been decided to be assigned. Rachmad said that until now Pertamina has not decided who will be partners in the project. According to Rachmad, changing the scheme to direct assignment will change Pertamina's obligations. In the PPP scheme, Pertamina only functions as the person in charge of the project.
In a special assignment, Pertamina will become a shareholder or shareholder. However, direct assignment is claimed to speed up the implementation time of this project.
This scheme also requires Pertamina to find a joint venture partner. If using the assignment scheme, the government will not finance the Bontang Refinery project which is designated as a national strategic project in Presidential Regulation Number 3 of 2016.
This project is also included in the list of priority projects in the Coordinating Minister for the Economy Regulation Number 12 of 2015. The government has prepared two incentives for Bontang refinery investors. . The first incentive is that investors can use existing infrastructure and utilities with a cooperation scheme for the use of government assets.
Another incentive is the extension of the tax holiday validity period of up to 15 years. In this project, Pertamina will optimize the assets of its subsidiaries, including PT Badak NGL. Rachmad said the use of PT Badak's assets could accelerate the construction of the Bontang refinery.
According to Rachmad, the project location in Bontang is adjacent to the operating area of PT Badak NGL, the operator of a liquefied natural gas refinery whose 50 percent stake is controlled by Pertamina. In addition to land, the facilities that can be utilized for the NGRR project are 21 units of high-quality boilers, power plants, storage tanks, and other public facilities.
Koran Tempo, Page-9, Saturday, Nov 12, 2016
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