Indonesia's state-owned Pertamina plans to build two more refineries in 2023 with a capacity of 300,000 b/d each, to meet rising domestic fuel demand, Wianda Pusponegoro, the company's vice-president for communications, said Friday.
"We estimate that the investment required for an integrated refinery with petrochemicals production is about $12-14 billion, but without petrochemicals, it is estimated to require about $10 billion," Pusponegoro said, adding that the company would look at global petrochemical demand before deciding.
Indonesia's fuel demand is estimated to reach 2.6 million b/d by 2023. Pertamina's existing refineries, new grassroot refineries, and various upgrading projects are still expected to increase production only to 2 million b/d.
Pertamina is building two grassroot refineries and modifying four existing ones. It has appointed Russia's Rosneft to build an integrated 300,000 b/d refinery at Tuban in East Java at an investment of $12 billion-13 billion. The refinery is expected to come on stream in 2021.
The other 300,000 b/d refinery is to be located at Bontang in East Kalimantan.
In November last year, Pertamina signed a heads of agreement with Saudi Aramco to upgrade the Cilacap refinery.
Pertamina is also working with Saudi Aramco to develop the 170,000 b/d Dumai refinery in central Sumatra and the integrated 125,000 b/d Balongan refinery and petrochemical complex in west Java.
The upgrading projects are expected to double Pertamina's refinery capacity from 820,000 b/d to 1.68 million b/d, Platts reported earlier.
Pertamina is in the process of issuing a tender for the engineering, procurement and construction work on the upgrade of the 260,000 b/d Balikpapan refinery in East Kalimantan. The ground breaking ceremony for this project was expected by the end of 2016 or early 2017, Pusponegoro said.
"The Balikpapan revamp will be done in two phases. Phase one will be completed in 2019. It will increase the capacity by 100,000 b/d to 360,000 b/d, but at this stage we will not be able to process sour crude. That is why in the second phase, we will increase the flexibility of the refinery," she said.
The second phase will start in 2020 and was expected to be completed in 2022, she added.
Previously Pertamina had appointed JX Nippon Oil and Energy as its partner for the Balikpapan project. But its estimates were considered too high and Pertamina decided to revamp the refinery by itself at an investment of $2.6 billion.
