Pertamina closes week with fresh deals

JAKARTA, May 27, 2016 – Indonesia’s Pertamina is expected to close an import deal with Iran on Sunday, a senior company official said on Friday. The agreement would see the island nation purchase crude oil and LPG. The news follows the announcement on Thursday of a co-operation agreement with Russia’s Rosneft for the construction of a greenfield refinery.

Pertamina and Rosneft will invest USD 12 billion-13 billion in the new facility, planned to be built in East Java. The Tuban refinery, with a design capacity of 300,000 bpd, is scheduled for completion in 2021, and will include a petrochemicals unit. Commenting on the deal, Pertamina president-director Dwi Soetjipto said the company could take a 55% stake or more in the venture. The company’s refining director, Rahmat Hardadi, told reporters that the plant’s output would consist of petrol (45%), diesel oil (35%) and petrochemicals feedstock (15-20%).

Several companies had been vying to take part in Indonesia’s new refinery project. Saudi Aramco, Kuwait Petroleum International, Sinopec and a Thai consortium comprising PTT Global Chemical Public Company and Thai Oil were among the shortlisted companies, as well as the eventual winner, Rosneft.

“We welcome the signing of the agreement. The geographical location of Indonesia, at a crossroad between two oceans, the Pacific and Indian, opens for the country the way for turning into a global transportation and energy hub which could become a critical point for global economic growth,” Rosneft chairman of the management board Igor Sechi said in a first reaction.

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