Pertamina wants to overhaul the partnership scheme for the construction of the refinery.
MAP OF REFINERY IN INDONESIA
PT Pertamina ensures the massive construction of crude oil processing facilities can not take place as scheduled. "The project is back a year or two. With a project value above US $ 15-20 billion, it is definitely worth it, "said Pertamina President Director Elia Massa Manik at Parliament Complex, Jakarta.
Massa explained the project backed up because there are some stages that are too risky if done simultaneously. As in the Balikpapan Refinery in East Kalimantan, he requested that the advanced end engineering design document be completed before proceeding to the procurement stage.
Previously, when Dwi Soetjipto was in charge of Pertamina, several processes such as the bankability feasibility study and the basic engineering study were conducted simultaneously.
The policy makes Balikpapan's revitalization target for one of Balikpapan's retreats from 2019 to 2020. The second phase of development also retreats from 2020 to the end of 2021. The first phase of revitalization focuses on increasing refinery capacity from 260 thousand to 360 thousand barrels of oil per day. The second stage is the increase of refinery complexity in order to produce various petrochemical and aromatic products. Pertamina is working on this project worth US $ 5 billion.
The target for the development of the Cilacap refinery, Central Java, also shifted to 2023, or back two years from the original plan. Cilacap is the largest refinery revitalization project that increases oil processing capacity from 300 thousand barrels per day to 400 thousand barrels per day.
The project, with a capital requirement of US $ 5.5 billion, is jointly managed by a joint venture with Saudi Arabian oil giant Saudi Aramco. The revitalization of the Balongan refinery in West Java is also delayed from 2020 to the end of 2021. The mass does not specify whether schedule changes will affect investment costs. Previously, the cost of refinery development reached US $ 1.2 billion or down compared to the original formula of US $ 2.7 billion
Pertamina has not decided on the Dumai refinery development schedule in Riau. Under the initial plan, the refinery can operate with a new capacity of 300,000 barrels per day by 2024. The revised schedule for the new plant in Bontang, East Kalimantan, has not been decided yet. The selection of Pertamina partners is still in the tender process.
The two companies that are strong candidates are Sinopec (China) and Kuwait Petroleum International (Kuwait). Similarly, a new refinery in Tuban-East Java is scheduled to operate backward from 2021 to 2023. The company cooperated with Rosneft, a Russian company, to build a processing facility of 300,000 barrels of oil per day.
Director of Processing and Petrochemistry Megaproject Rachmad Hardadi said the rescheduling operation schedule made Pertamina have to revise the agreement together with partners, namely Aramco and Rosneft. The amendment also relates to Pertamina's proposal to amend the for-take agreement. Under the deal, companies are required to absorb 100 percent of refinery output. These provisions eventually become dependents affecting the company's financial liabilities.
Koran Tempo, Page-21, Thursday, June 8, 2017
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