Pertamina to construct Tuban refinery with China's Sinopec<\/p>\n
The Jakarta Post
\nJakarta<\/p>\n
State oil and gas company PT Pertamina will work with the China
\nPetroleum & Chemical Corp. to build the country's tenth refinery
\nin Tuban, East Java, Minister of Energy and Mineral Resources
\nPurnomo Yusgiantoro says.<\/p>\n
Pertamina and Sinopec, as the Chinese company is known, will
\nsign a memorandum of understanding (MOU) during President Susilo
\nBambang Yudhoyono's visit to China later this week, Purnomo said
\non Sunday.<\/p>\n
Pertamina's president director Widya Purnama said that
\nconstruction was expected to start as soon as possible, depending
\non further discussions between the two companies.<\/p>\n
\"We hope to start this year, or next year at the latest,\" said
\nWidya. He declined to give a date for the coming onstream of the
\nrefinery or the investment involved in the capital-intensive
\nendeavor.<\/p>\n
The refinery will have a processing capacity of between
\n150,000 barrels of crude oil per day (bpd) and 200,000 bpd, said
\nWidya.<\/p>\n
The President is slated to visit China for three days,
\nstarting on Wednesday. Purnomo said that the presidential
\nentourage would visit coal-fired power plants located at the mine
\nheads, which Indonesia is also planning on building.<\/p>\n
In order to prevent fuel shortages in the future, Susilo has
\nordered the development of a refinery in Tuban, which will
\nprocess oil from the Cepu block, located between East Java and
\nCentral Java, and the Jeruk field, south of Madura island.<\/p>\n
Cepu, which will be operated by a joint venture between
\nPertamina and U.S. energy giant ExxonMobil, is expected to
\nproduce 170,000 bpd at its peak, while it is estimated that Jeruk
\nwill produce at least 50,000 bpd.<\/p>\n
At present, Indonesia has nine large and small refineries with
\na total processing capacity close to 1 million bpd.<\/p>\n
With domestic fuel consumption rising by some 7 percent per
\nyear, the government, through Pertamina, has to import some
\n300,000 barrels of crude oil and 400,000 barrels of fuel products
\nper day to secure supply.<\/p>\n
Indonesia suffered a major fuel crisis a month back, the
\neffects of which are still being felt, after the country's fuel
\nstocks dropped to less than 18-days supply, with premium gasoline
\ndown to only 12.7-days supply, compared to the ideal buffer stock
\nof 22-days supply. The crisis was due to cash-flow problems at
\nPertamina and the government's difficulties in covering pay fuel
\nsubsidies amid soaring global oil prices.<\/p>\n
The crisis prompted the current energy-conservation drive,
\nwhich may see higher luxury taxes imposed on large-engined cars,
\nas well as additional taxes on people owning more than one car,
\nas a means of reducing fuel demand in the transportation sector.<\/p>",
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