State-owned PT Pertamina will spend $1.3 billion to build a 40,000 to 50,000 barrel-per-day (bpd) cracking unit at its Cilacap refinery, an official said Wednesday (22/11/06).
"The new cracking unit will enable us to shift production from fuel oil to more valuable products, such as gasoline and propylene," Suroso Atmomartoyo, Pertamina's director of processing, was quoted as saying by Dow Jones Newswires.
Atmomartoyo said the refinery will stop producing fuel oil, as there is essentially no longer any local demand.
Pertamina will begin building the cracking unit in 2008 at the latest and hopes to complete it by 2010. The move is part of Pertamina's five-year plan to increase output at its refineries, for which it aims to spend as much as $18 billion.
Pertamina plans to double the output at its Balongan refinery to 250,000 bpd by 2011 and increase the average daily output at its Dumai refinery in South Sumatra and Balikpapan refinery in Kalimantan by 20% next year.
The company operates seven refineries with a total production capacity of about 1 million bpd, but it still needs to import petroleum products because domestic output is unable to meet demand.