Pertamina won't process Minas crude oil in S'pore

Pertamina won't process Minas crude oil in S'pore

Bloomberg, Jakarta

Pertamina, Indonesia's state oil company, decided to scrap a plan to process its Minas crude oil in Singapore, a company official said. A contract to process Iranian Light crude will go ahead, he said.

In June, Pertamina officials said Singapore Petroleum Co. would process 62,500 barrels a day of Indonesia's Sumatra Light, or Minas, crude oil. The plan was scheduled to start in October after it was postponed by two months.

Pertamina decided not to complete a contract with Singapore Petroleum to refine Minas crude oil because the processing fee was too high, said Muchsin Bahar, Pertamina's senior vice president for downstream affairs.

"They are asking for a higher processing fee so we decided to drop the plan," Muchsin told reporters in Jakarta.

Pertamina will go ahead with a plan for Singapore Petroleum to process 30,000 barrels a day Iranian Light crude oil for the Indonesian company starting in October, Muchsin said.

The crude oil processing agreement was part of Pertamina's plan to ensure it has enough fuel to meet domestic demand after closing its Balongan refinery for maintenance. The plant in West Java was shut for maintenance on Aug. 18.

Pertamina will import fuels through its trading unit, Pertamina Energy Trading Ltd. for delivery in early October, to ensure that it has enough oil products in Indonesia during the Balongan shutdown, Muchsin said.

Singapore Petroleum owns a third, or 92,500 barrels a day, of the processing capacity at Singapore Refining Co. Singapore Refining has capacity of 285,000 barrels a day. BP Plc and ChevronTexaco Corp. each have a one-third stake in the refinery.