Pertamina squashes refinery market talk

Pertamina squashes refinery market talk

SINGAPORE (Reuter): A Pertamina source squashed market talk yesterday that the Musi refinery was having problems restarting a unit, forcing Indonesia to buy extra amounts of gas oil.

The 33,000-barrel-per-day (bpd) crude distillation unit (CDU- 5) at the refinery was shut for scheduled maintenance on May 25 and resumed operations on June 19, the source at the state oil company said.

But market talk had suggested the refinery was having problems restarting the CDU and traders were closely watching Indonesia's gas oil imports for July.

So far Indonesia has bought 2.5 million barrels for July and was rumored to be seeking additional cargoes for July.

Traders said market talk suggested Pertamina was forced to buy a prompt 30,000-ton gas oil cargo from a Singapore trader this week because of the problems and that it might be negotiating to buy another 80,000 tons for mid-July delivery.

But the Singapore swaps market was not too excited, brokers said. July paper was being discussed at $24.35/$24.45 per barrel, which straddled Wednesday's levels.

The Musi refinery has five CDUs -- CDU-2 to CDU-6-- and has a total crude processing capacity of 136,000 bpd.

The source said the refinery was running at slightly under capacity of 133,000-134,000 bpd.

The source said one of two redistillation units which is linked to CDU-5 was currently undergoing modification to raise its current 6,000-bpd capacity to 10,000 bpd by August or September.

Upon completion, redistillation unit one would be converted into the refinery's sixth crude unit or CDU-7.

The source said the modification had not disrupted operations at CDU-5.

But traders noted that Indonesia might buy more in August ahead of a scheduled shutdown at a 200,000-bpd crude unit at the Cilacap refinery in September, and the turnaround at the 125,000- bpd Balongan refinery in October.