JAKARTA (TheInsiderStories) – The largest oil & gas producer in Indonesia PT Pertamina stated to reduce some of its financial burden will renegotiate the cooperation with Saudi Aramco and Russian Rosneft to develop two major refinery projects in Indonesia, said one senior official. Both projects are located in East Java.
Pertamina has signed a joint venture agreement with Saudi Aramco for the Cilacap Refinery upgrade with total investment around US$6 billion and with Rosneft to develop the new Tuban Refinery with estimate costs US$15 billion.Pertamina has 55 percent stake in both projects.
President Director Elia Massa Manik explained, Pertamina has asking both partner to conduct joint marketing efforts instead of making the company the sole off-taker for oil produced at the refineries. The off-take agreement will be in line with the shares portion of each party, He added.
Pertamina and Saudi Aramco today signed a Joint Venture Development Agreement (JVDA) on December 2015, as an early milestone for both parties in developing and operating the Refinery Unit IV Cilacap, Central Java development and operation.
Cilacap Refinery is a part of Pertamina’s Refinery Development Master Plan (RDMP) and its capacity is planned to be increased to 400,000 barrels per day and designed to process the crude oil from Saudi supplied by Saudi Aramco. The Front End Engineering Design (FEED) stage in the second quarter of 2017, and project startup is targeted by 2021.
While with Rosneft, Pertamina have signed a GRR Tuban JDVA for the construction of the Tuban refining and petrochemical complex located in the eastern part of Java on October 2016.
The JVA specifies the allocation of equity stakes between JV participants, JV management and governance, feed stock, marketing dan offtake, funding principles, HR, standard clauses and further steps for implementation.
The design capacity of primary processing at the Tuban complex is 15 million MTA. It will run on imported medium and heavy grades of sour crude. The project provides for the construction of a large fuel oil catalytic cracker and a petrochemical complex. The complex is assumed to be able to accommodate VLCC supertankers with a deadweight of up to 300 thousand tonnes.
The establishment of the JV marks a new phase in the development of a modern refining and petrochemical complex in Indonesia. The project is an important part of Rosneft’s and Pertamina’s mutual cooperation, which is instrumental to providing energy supplies for Indonesia and the region. It is also consistent with Rosneft’s aim to achieve a stronger presence in the oil & gas market in the Asia-Pacific Region.
Implementation of the project will allow Rosneft to acquire a new international partner for developing a capital intensive project in Russia. Participation of Pertamina in the upstream project in the territory of the Russian Federation will strengthen long-term relations between the Russian Federation and Indonesia, and also serves Pertamina’s mission to secure energy resources for Indonesia’s rapid increasing demands on energy worldwide.
(Written by Linda Silaen, Email: email@example.com)