Construction of Balongan refinery to start soon

A'an Suryana, The Jakarta Post, Jakarta

State oil and gas company Pertamina signed a contract on Friday with a consortium consisting of a Japanese and an Indonesian firm, which will develop a refinery facility that will produce unleaded gasoline.

The US$153 million refinery facility will be located in Balongan, West Java.

The contract was signed by Pertamina president Baihaki Hakim, president of Toyo Engineering Corporation Toshiko Hirose, and director of PT Rekayasa Engineering Sri Widodo.

The construction of the project will start at the end of February, and is slated to be completed after 27 months of construction work.

The construction of the refinery is part of the government's program to push car owners to use unleaded gasoline so as to reduce the level of air pollution.

Most automotive vehicles here currently use leaded gasoline, which is deemed hazardous to health.

The government hopes Indonesia will be lead-fuel free by 2005.

The lead-fuel free program was started by the government in July 2001 and already has been launched in Jakarta, Cirebon (West Java), and Bali.

The above consortium won the contract to develop five refinery facilities after outbidding some 47 competitors. The contract is called an Engineering, Procurement and Construction (EPC) contract.

"They were chosen because they had offered the lowest price," Baihaki told reporters after the signing of the contract at his office.