Pertamina to launch new fuel product

Leony Aurora The Jakarta Post/Jakarta

Amid skyrocketing global oil prices and kerosene scarcities around the country, state oil and gas company PT Pertamina is introducing a new fuel product created from oil wells' unused output.

The product, called gasified petroleum condensate (GPC), is expected to provide an alternative to kerosene for home and industrial use, especially for people living close to oil fields, said Pertamina president director Widya Purnama at the introduction of the product on Tuesday.

"GPC will be cheaper than LPG," Widya said, referring to the widely used liquefied petroleum gas.

GPC is derived from unstable condensate -- between 10 percent and 20 percent of liquid hydrocarbon gas produced as a byproduct of oil wells -- that is usually left to evaporate without being utilized.

According to Pertamina, with a global crude price assumption of US$44 per barrel, the base price for GPC will be Rp 3,000 (about 32 US cents) per kilogram.

One kilogram of GPC can keep a specially modified stove burning continuously for up to eight hours. In tests conducted by Pertamina, the GPC was stored in three-kilogram canisters.

"We have not determined the sale price of GPC just yet," said processing director Suroso Atmomartoyo. "We will first acquaint people with the product."

Pertamina raised the price of LPG late last year by more than 40 percent to Rp 4,250 per kilogram from Rp 3,000 a kilogram.

The government also increased fuel prices by an average of 29 percent on March 1.

Although the price of kerosene for households -- usually poor households -- was kept at Rp 700 a liter, there have been reports that the price of kerosene has doubled in parts of the country where shortages have been experienced.

Pertamina's research and development facility in South Sumatra has been developing GPC for the last two years. The new fuel is expected to reduce the dependency on kerosene among people living near oil fields in remote areas.

In the first phase, Pertamina plans to produce some 1,370 tons of GPC per month using 300 barrels per day of condensate produced in South Sumatra oil fields.

"We hope to start selling GPC this year," said Suroso.

"After South Sumatra, we will utilize the condensate in the West Java upstream operation area," he said.