Government sets deadline for mending refinery

Government sets deadline for mending refinery

JAKARTA (JP): The government has set a six-week deadline for
contractors to repair a newly completed export-oriented oil
refinery in Balongan of West Java, of which technical troubles
have delayed its dedication.

"I have instructed the state oil company Pertamina's
contractors responsible for the construction of the country's
first export-oriented refinery (Exor 1) to cope with damages at
the refinery and to assure its full operation by the middle of
March," Minister of Mines and Energy I.B. Sudjana said yesterday.

The refinery, designed to have a processing capacity of
125,000 barrels of crude oil per day, was originally scheduled to
be dedicated by President Soeharto on Monday. But damages
occurring during its trial operation caused the delay of its
dedication.

Sudjana, who met with the President at the Merdeka Palace
yesterday to report on the condition of the refinery as well as
his recent visits to Arabian countries, told reporters that the
damages have forced the refinery to operate only at 60 percent of
its capacity.

"The President has also agreed on the delay of the plant's
operation and instructed Pertamina and its contractors to prepare
as many as operators for the sophisticated project," he said.

Contractors

Pertamina appointed JGC Corporation of Japan, Foster Wheeler
of the United States, Mitsui of Japan and Far East Oil Trading
Corp., an affiliate of Pertamina, as its contractors for the
construction of the refinery. The construction of the refinery
started in September 1990.

Pertamina recently said that the US$2 billion refinery was
constructed with financial assistance from Java Petroleum
Investment Co. Ltd. -- a consortium grouping Mitsui Corp.,
Marubeni Corp., Sumitomo, C. Itoh & Co. (now Itochu) and 20
Japanese bankers.

Sudjana did not elaborate on the damages. Pertamina recently
reported that the trouble was partly caused by bottlenecks at a
crude oil processing unit, called Residue Catalytic Cracking
machinery, which processes crude oil with a high level of metal
and residue contents.

Sudjana refused to estimate the losses caused by the delay of
the refinery's full operation, but said: "We've surely missed an
opportunity to export oil products due to the delay of its full
operation."

The refinery is designed to produce 136,000 tons of liquefied
petroleum gas per year and 186,000 tons of propylene a year,
54,500 barrels per day (bpd) of aviation gas, 10,437 bpd of
kerosene, 24,500 bpd of automotive diesel oil, 14,890 bpd of
industrial diesel oil and 7,200 bpd of decant fuel as well as 27
metric tons of sulfur per day.

Pertamina is now operating five oil refineries with a total
processing capacity of about 850,000 bpd.(fhp)