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Pertamina selects Sinopec, Saudi Aramco, JX Nippon and PTT Thailand to upgrade refineries

JAKARTA (Rambu Energy) – State owned oil and gas company PT Pertamina has selected four multinational companies (MNCs), namely Sinopec of China, Saudi Aramco, JX Nippon Oil and Energy of Japan and PTT Thailand to upgrade its ageing oil refineries.

“After conducting roadshows to Japan, South Korea, China and Middle East, we received expressed of interest from 30 companies to upgrade the refineries. We have shortlisted four companies to involve in the Refining Development Master Plan (RDMP) of Pertamina,” Iriawan Yulianto, SVP Business Development of PT Pertamina, said at Pertamina Energy Outlook conference in Jakarta (Dec. 3).

He said the main purpose of the upgrading will be to increase the capacity and competitiveness of the refineries. He said currently domestic oil refineries of Pertamina only cover 48 percent of domestic oil demand and the remaining 52 percent of the fuel products were imported.

“If we don’t increase our refineries capacity, the gap will be higher to around 38 percent by 2025,” he said.

He noted based on Pertamina’s estimation, Indonesia will face a significant shortage in refining capacity equivalent to around 5-8 refineries by 2025.

Yulianto said Pertamina hopes to sign MoU with the above partners on Dec. 10, 2014 on the refinery upgrade plan.

Under the proposed plan, Sinopec will involve in upgrading the Plaju refinery, Saudi Aramco would upgrade the Dumai refinery, JX Nippon Oil and Energy would upgrade Balikpapan refinery and PTT Thailand will handle Balongan refinery.

He said the total cost to upgrade the refineries could reach US$20 billion. The exact cost will be discussed further with the above partners. The engineering, procurement and construction (EPC) of the refineries could start in 2017 took about 2-3 years to complete.(*)

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