Indonesia is likely to partner with a Middle Eastern investor for building a petroleum refinery with a capacity of 150,000 barrels per day in Java, Indonesia.
“We will sign an agreement with the investor for the refinery construction at the next commemoration of the Asian African Conference,” the Energy and Mineral Resources Ministry’s acting director general for oil and natural gas, I Gusti Nyoman Wiratmaja said.
According to him, the land for the refinery is already available in Java, so land acquisition will not be required.
However, Wiratmaja refused to reveal the name of the investor and the location for the refinery.
The investor will cooperate with state-owned oil and gas giant PT Pertamina as a purchaser. The investor is also ready to supply crude oil to the refinery for 20-30 years.
“Although the government wants the groundbreaking of the refinery to be held in 2015, it looks possible only by early 2016,” Wiratmadja said.
The government hopes the refinery will officially become operational by late 2018, he added.
According to Wiratmadja, the refinery will be able to produce better fuel products such as gasoline with a registered octane number (RON) of 92 but not petrochemicals.
Based on feasibility studies, the refinery will be economically viable if Pertamina acts as a purchaser of minimum 50% of refined products.
Wiratmadja revealed that the process of the construction of the oil refinery, which will come up in Bontang, East Kalimantan, is ongoing and it will be built under a public-private partnership (PPP) scheme.
“The PPP for the construction of the refinery will be auctioned in the near future,” he added.