Pertamina plans to redesign Balongan refinery
JAKARTA (JP): State oil and gas company Pertamina plans to redesign its US$2 billion Balongan refinery in West Java following intermittent production problems.
Company processing director Samto Utomo said the refinery's residue catalytic cracker (RCC) unit, which produces liquefied petroleum gas (LPG) and gasoline, might have a design "fault" in view of its repeated production failure over the past four months.
He said the RCC is guaranteed by its designer, the United States designing and engineering company Universal Oil Product, to be able to operate for two years before taking a regular 40- day break.
But the unit has twice experienced mechanical failures over the past four months despite the fact that it has only been operating for one year since its last break in Feb. 1997, he said.
"We are thoroughly reviewing the design so that we can modify it later to improve its reliability."
Samto said Pertamina was assisted by Universal Oil and British Petroleum, which has extensive experience in operating RCC.
"Under the contract, we shall not pay Universal Oil to rectify the unit's design," Samto said.
The Balongan refinery was built by Pertamina with contractors JGC Corporation of Japan and the U.S.'s Foster Wheeler from 1990 to 1995.
Project financing was provided by Java Petroleum Investment Co. Ltd. -- a consortium grouping Mitsui Corp. Marubeni Corp. Sumitomo, Itochu and 20 Japanese bankers.
The refinery, designed with a processing capacity of 125,000 barrels per day (bpd) of crude oil, has two production units: the so-called crude distillation unit (CDU) and RCC unit.
CDU processes crude oil into naptha, kerosene, automotive diesel and residue; and RCC turns the residue from CDU into LPG and Premium, Super TT and Premix gasoline.
Jakarta and its surrounding areas get their fuel supply from the Balongan refinery.
Samto said the refinery's CDU did not have technical problems and could still operate normally.
But, the refinery's RCC unit was broken last Monday and should cease operation for one month of repairs.
Some analysts believe the repeated production problems at the Balongan refinery's RCC unit was because of its substandard design.
But Samto denied the allegation, saying the design made by Universal Oil had met international standards.
The unit's technical failures might be because of two factors, including that its capacity was too big and it was fed with the low-quality crude oil, he said.
The Balongan refinery's RCC unit is the world's biggest with a processing capacity of 83,000 bpd, compared to other RCC units in the world which have a capacity of between 30,000 and 40,000 bpd.
"We initially wanted to build two RCC units with the capacity of 40,000 bpd each but we at last decided to have one big RCC unit since its construction was 30 percent cheaper than the construction of two smaller units," Samto said.
The unit is fed with Duri crude oil, which is known as the world's lowest quality crude oil due to its high metal content, produced by PT Caltex Pacific Indonesia in Riau.
Duri crude oil is cheap and has low demand on the international market.
"Pertamina uses the Duri crude oil for its Balongan refinery to help strengthen the crude oil's price on the international market," Samto said. (jsk)