Balongan unit to resume operations next month

JAKARTA (JP): The catalytic cracking unit of the state oil and gas company Pertamina's refinery in Balongan, West Java, is expected to resume operation early next month after almost a month-long stoppage.

The residue catalytic cracking (RCC) unit, which produces liquefied petroleum gas (LPG) and Premium, Super TT and Premix gasoline, ceased operation May 11 due to technical failures.

Designed with a processing capacity of 125,000 barrels per day, has another production unit, the refinery has another crude distillation unit (CDU). This remains in operation to produce naptha, kerosene, automotive diesel oil and low sulfuric wax residue (LSWR).

"We hope the RCC unit will resume operation early next month," company processing director Samto Utomo told The Jakarta Post and Bisnis Indonesia.

The US$2.4 billion Balongan refinery has attracted unwanted media attention due its repeated production problems.

Its RCC unit is guaranteed by its designer, U.S. designing and engineering company Universal Oil Product, to be able to operate full time for two years before a 40-day break.

But the unit has twice experienced mechanical failures over the past four months even though its last periodic break was in February 1997.

Sources at Pertamina attribute the repeated failures to substandard construction. They said Pertamina officials used low quality construction materials but marked up prices to meet the project value of $2.4 billion.

"We hope the Attorney General's Office will investigate the corruption at the refinery," the sources said.

They estimated the actual cost of the refinery at less than $1.9 billion.

Minister of Mines and Energy Kuntoro Mangkusubroto has ordered Pertamina to conduct technical auditing of the refinery.

Samto said Pertamina was currently reexamining the RCC unit's design together with Universal Oil and the British Petroleum. (jsk)