Pertamina Is Ready to Integrate TPPI with GRR Tuban

After controlling 51% of Tuban Petro's majority shares, Pertamina is ready to integrate PT Trans-Pacific Petrochemical Indotama (TPPI) Refinery which is a subsidiary of Tuban Petro with the Grass Root Refinery (GRR) Tuban mega project.

Nicke Widyawati

Pertamina President Director Nicke Widyawati explained that the restructuring of Tuban Petro is part of Pertamina's refinery which prioritizes flexibility, in which the refinery mode can switch to either petrochemical or mogas modes. This makes the refinery production can adjust to the demand at the time of operation.

Then with the integrated supply of raw materials between one refinery and other refineries, it is hoped that it can also improve efficiency in terms of both operational expenses and capital expenditures, so as to achieve maximum profitability. With a maximum level of profitability, Pertamina refinery projects will be able to become sustainable businesses in the future.

"So it is clear that our ongoing refinery project will become a sustainable business because it can adapt to market needs and be supported by integration between our refineries and other Pertamina infrastructure," Nicke said.

Nicke said that Pertamina is currently developing refineries in 6 locations, the construction of which is integrated with the construction of a petrochemical plant. One of them is the Tuban GRR which will later be integrated with TPPI, with a 7 km connecting pipeline being built.

Nicke added, the petrochemical business market opportunity is currently around Rp 40-50 trillion per year. In addition, the petrochemical business also has a higher margin than fuel oil.

Nicke said the move to integrate the TPPI refinery with GRR in Tuban was carried out by Pertamina by carrying out a corporate action to purchase Rp. 3.2 trillion in the Tuban Petro series B shares, so that Pertamina currently controls a 51 percent majority stake. By controlling majority shares, Pertamina has controlling shares in order to develop TPPI.

Nicke explained, starting in 2020 according to the RKAP, Pertamina will increase the aromatic production of TPPI refineries from currently 46 thousand tons to 55 thousand tons. In the long term, Pertamina will also build an Olefin Center, so that later the TPPI will produce petrochemicals of 700 thousand tons per year.

At the same time, the Tuban GRR megaproject will have a petrochemical production facility with 1,205 ktpa of polypropylene products, 1,317 ktpa of paraxylene and 750 ktpa of polyethylene.

Investor Daily, Page-9, Tuesday, Jan 14, 2020