Balongan unit to resume operations next month

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)