Aramco may reduce stake t0 30% in Indonesia refinery

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JAKARTA (TheInsiderStories) – Saudi Aramco could reduce its participation in the proposed US$5.5-billion Upgrade Project of Refinery Unit Cilacap in Central Java from 45 percent to 30 percent, said Indonesia’s interim energy minister Luhut Pandjaitan.

In May 2016, Indonesia’s state-owned energy provider PT Pertamina signs an engineering and contract management services with giant Middle East oil and gas company Saudi Aramco for the Upgrade Project of Refinery Unit Cilacap.

Executive Director International Operations of Saudi Aramco Said A. Al-Hadrami said the signing agreement will pave way for a long-term partnership with Pertamina. He added, Aramco will first focus on this project and later on move on to jointly other projects.

Meanwhile, Director for Processing of Pertamina Rachmad Herdadi said the engineering design is expected to be completed in 8-9 months that will raise the production capacity of RU Cilacap to 370,000 barrels of oil per day in 2022. The refinery will also produce derivative products, including 600,000 tons of petrochemical products from 300,000 tons per annum at present.

The construction is scheduled to start in October 2018. The fuel output from the refinery will meet the Euro 4 and Euro 5 standards.

According to Pertamina’s CEO Dwi Soetjipto, Saudi Aramco is ready to supply up to 270,000 barrels per day (bpd) of crude oil to Cilacap refinery. Saudi Aramco currently supplies around 125,000 bpd of crude to Cilacap, meeting about one-third of its crude needs.

The upgrade calls for an increase in processing capacity to 370,000 bpd from 348,000 bpd at present, and will include a new hydro cracker unit. The Cilacap upgrade could be the first of several refinery projects Saudi Aramco is considering for Indonesia, Dwi said.

Pertamina is also in the process to upgrade Balongan and Dumai refineries which require combined investment of around US$15 billion. The projects do not only increase the capacity of those oil refineries but also making the production process to be more efficient.

The upgrade of the Cilacap refinery is designed to increase the facility’s crude processing facility from 348,000 bpd to 370,000 bpd. A heads of agreement for the project was signed between Pertamina and Saudi Aramco in November 2015.

The Aramco-Pertamina joint venture for the project is expected to be formalised in October this year during an official visit of Saudi King Salman bin Abdulaziz to Jakarta. Aramco has been looking at increasing its downstream and petrochemical investments in countries such as China, India, Indonesia, Vietnam and the US.

 

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Source: The Insiderstories
Aramco may reduce stake t0 30% in Indonesia refinery

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