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Pertamina to start developing ‘green refinery’ in Sumatera

Pertamina’s Refinery Plant in Dumai, Riau (Image credit: Pertamina)

JAKARTA (RambuEnergy.com) – State-owned diversified energy company PT Pertamina said it will start developing the so-called ‘green refinery’ as part of efforts to reduce the country’s dependence on imported fossil fuel and at the same time boosting the use of the domestic source of greener fuel.

“In order to reduce the deficit of the government current account, we (Pertamina) has a plan to produce B20 (biofuel 20), reduce the import of fossil fuel and LPG (liquid petroleum gas). If we can reduce the import of 225,000 barrels of fuel import, it will really support the government program,” said Pertamina President Director Nicke Widyawati at the opening of Pertamina Energy Forum 2018.

“As for B20, we will start developing a green energy project in Dumai (Riau) and Plaju (in South Sumatera),” Nicke said.

The government has been over the past few years struggling with the implementation of mandatory blending of biofuel into its diesel fuel, called biodiesel.

In September 2013, it began the mandatory blending of 10% of biofuel into diesel fuel (B10). In November 2015, it launched the implementation of B-15, in which in every litre of diesel fuel, 15% of it is comprised of biofuel.

To realize the policy, the government planned to absorb 5.3 million kiloliters of biodiesel or equivalent to 4.8 million tons of Crude Palm Oil (CPO) in the following year.

Despite the implementation of B15 has not been smooth, the government on Sept 1, 2018 has begun the implementation of B20. The B20 program applies to fuel distributor in this case fuel station, both the holder of public service obligation (PSO) companies and non-PSO, which distribute fuels to the industrial sector.

The mandatory use of B20 is part of the government’s efforts to reduce dependence on fuel import as well as reducing the current account deficit.

Under the program, Pertamina buys fatty acid methyl este (FAME) from palm oil producers. The government has set a price of Rp6000 per litre of FAME, which is considered quite attractive.

Who Benefits?
The B20 mandatory program certainly has and will benefit major palm oil producers, including major producers of crude palm oil in the country. The program is also expected to boost the demand of CPO from the domestic market on the back of lower CPO price in the world market.

In the past years, among CPO producers that have consistently supplied FAME to Pertamina are including PT Musim Mas, PT Wilmar Bioenergi Indonesia, PT Wilmar Nabati Indonesia, PT Pelita Agung Agri Industri, PT Darmex Biodiesel, PT Cemerlang Energi Perkasa, PT Ciliandra Perkasa, PT Energi Bahari Lestari, PT Anugerah Inti Gemanusa, PT Primanusa Palma Energi, PT Bioenergi Pratama Jaya and others. (*)

Written by Roffie Kurniawan (email: roffie.kurniawan@gmail.com)

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