Balongan plant shutdown

Balongan plant shutdown

SINGAPORE (Reuters): Indonesian state-owned Pertamina had shut its 125,000 barrel-per-day (bpd) Balongan refinery last week for one month due to a mechanical fault, a source close to the refinery said yesterday.

"The refinery was shutdown last week and will be down for one month," the source said.

The source said the long shutdown period was due to the difficulty in getting replacement parts manufactured.

Traders said the shutdown would put a strain on Indonesia's balance of payments as the country will now have to raise its oil product imports after cutting back purchases in February and March in order to save foreign currency expenses.

They said exports of gasoline and naphtha will be curbed as the Balongan refinery is the main export producer, with its large 83,000-bpd catalytic cracker.

But others said the shutdown could lead to an increase in crude exports which have been cut sharply in recent months due to the higher domestic refinery utilization.

Indonesian domestic refining capacity was raised by about 100,000-bpd in 1997 to 1.05 million bpd and the eight refineries were operating at full capacity in order to save on imports.