Middle East investors interested in doing business of oil and gas in Indonesia

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Februari 24, 2015

The investor plans to build a refinery with up to 150 thousand barrels per day of production capacity. “They are came from the Middle East, but we can not mention his name,” said the executive duties of the Director General of Oil and Gas, IGN Wiratmadja, in Jakarta, last weekend.

Wiratmadja added, the signing of a memorandum of understanding for refinery construction will be done during the commemoration of Asian-African Conference in Bandung (April). The investors are also ready supply crude oil within 20-30 years. They will partner with PT Pertamina (Persero) as the main buyer.

Wiratmadja hope that the refinery can be realized immediately. “But it seems the implementation start 12 months from now or in early 2016.”

The construction stages take up to three years. According Wiratmadja, the refinery will be ready for operation by the end of 2018. He did not disclose details of the refinery site. Wiratmadja only states refinery construction does not require land acquisition because we already had the land required in Java.

Wiratmadja added, we will only produce fuel with octane 92. but he convinced that the refinery meets the standards and economical.

The Energy Studies Center, University of Indonesia, Iwa Garniwa, assess the undisputed foreign investors plan to build an oil refinery here. “There is nothing wrong if foreign investors will wake up refineries in Indonesia,” he told reporters yesterday.

According Iwa, Indonesia did not build an oil refinery in the last 10 years. While the need for fossil fuels continues to rise each year. Domestic fuel consumes are currently about 1.5 million barrels per day. On the other hand, the lifting range of 900 thousand barrels per day. There is a need for about 600 thousand barrels per day which must be imported. “While today’s Indonesia wants reduced fuel imports.”

Iwa did not dispute the refinery built in the domestic or foreign companies. “Because, wake refinery was not cheap, it is expensive,” he said. But he said he did not know exactly how much the value of the investment to build refineries.

Earlier, Director of Pertamina refinery reliability Soetjipto said main key in addressing the challenges of energy demand growth. Pertamina also taken significant steps associated with the refinery. “Pertamina take concrete steps towards the five existing refineries through refining project masterplan development program,” said Dwi in Jakarta, some time ago.

Last December, Pertamina has been holding three potential investors to support the project. They are Saudi Aramco, Sinopec, and JX Nippon. With this project, Pertamina expects to increase refinery flexibility of production capacity up to 1.6 million barrels per day.

Source : Tender Indonesia

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