JAKARTA (TheInsiderStories) – China’s Sinopec Group and Kuwait Petroleum Corporation interested to acquire part of participating interests in Grass Root Refinery (GRR) Bontang in East Kalimantan owned by state-owned energy company, PT Pertamina.

President Director Elia Masa Manik told press on Wednesday, Pertamina will release up to 10 percent shares to the potential partner. While, according to Director for Refinery and Megaproject of Pertamina Rachmad Hardadi nine bidders has expressed their interest including Sinopec and Kuwait Petroleum.

“Share that will be released around 5 to 10 percent due to financial covenant. This is what we are talking about because we prefer joint effort marketing,” said Masa.

Pertamina officially unveiled its GRR Bontang project to investors on March, with estimated investment of US$10 billion. The refinery will be located in Bontang, East Kalimantan, the home of nation’s oil and gas rich area.

The launch was held in Jakarta, which is attended by hundreds of potential investors from various industries, oil and gas companies, traders as well as financial institutions.

Hardadi tried to lure investors to take part in the mega project. He said the project is attractive because Pertamina will act as the off-taker, assuring the sustainable buyer and continuity of the project.

Portion of the products will be exported to neighbouring countries such as Philippines and Australia and some portions will be delivered to petrochemical industry.

He said the fuel produce by Bontang Refinery will meet the Euro 5 standard. “The development of GRR Bontang is part of Pertamina’s drive to increase its fuel production capacity to 2 million barrels per day from around 1 million barrels per day at present,” he said.

Unlike Tuban refinery, Pertamina would be willing to onl hold stakes between 5 to 25%, with majority stakes to be held potential investors or strategic partners. But Pertmaina will have the option to raise its stake by up to 25% within 10 years.

The other interesting aspect is that Pertamina and its strategic partner will not be needed to develop supporting infrastructure such as port, power plant, airport, residence and otheers as those public infrastructure are already developed.

Pertamina earlier tied up with Rosneft of Russia in developing Tuban GRR project. Both parties have set up a JV and are now conducting feasibility study.

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