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Indonesian Pertamina Defers Refinery Projects Over Funding

Indonesia’s state energy firm Pertamina plans to postpone upgrades at some of its refineries, including a joint project with Saudi Aramco, over financing concerns, said Rachmad Hardadi, director of megaprojects and petrochemicals at the Indonesian company.

The completions of some refinery upgrades have been delayed by one to two years, so that “the cost is not a burden over the same [one or two] years,” Reuters quoted Hardadi as telling reporters on Tuesday.

The postponement of some refinery capacity upgrades at home would potentially make Indonesia—one of the biggest fuel importers in Southeast Asia—import more refined oil products over the next ten years than initially expected.

Speaking to reporters, Hardadi said that the timetables had to be readjusted to fit Pertamina’s plans for upstream acquisitions and infrastructure needs.

The Indonesian company is waiting for Saudi Aramco’s board to approve Pertamina’s plan to delay the completion of the upgrade of the Cilacap refinery in Central Java. Last year, Pertamina signed a JV with Aramco for the expansion of the refinery to boost daily maximum runs from 348,000 barrels to 400,000 barrels. Now the Indonesian company awaits the approval of Aramco—which has 45 percent in the project—to defer the completion to 2023 from the initially targeted project startup in 2021, according to Hardadi.

Related: Can Canadian Crude Compete In Asia?

In another joint refinery project with a major foreign group, Pertamina is partnering with Rosneft—which holds 45 percent—in a project to build the Tuban refining and petrochemical complex in the eastern part of Java. For this project, Pertamina plans to discuss with Rosneft postponing the targeted completion to 2023 or 2024, from 2021, according to Hardadi.

Tuban is expected to have the capacity to process 300,000 bpd of crude oil.

In addition, completion of stage one of the upgrade at Balikpapan refinery to increase capacity to 360,000 bpd from 260,000 bpd, would be delayed to 2020, instead of initially planned 2019, Reuters quoted Hardadi as saying.

By Tsvetana Paraskova for Oilprice.com

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