JAKARTA (TheInsiderStories) - The Indonesian government pushes to realize the mega Bontang refinery project as only half of the current domestic fuel consumption is still imported. On Tuesday (Feb. 9), the government decides in order to accelerate the project realization, the Bontang refinery will be developed through Public and Business Entity Partnership or government and business entity, in which state owned energy company PT Pertamina acting as project leader.
The government made the decision following a coordinating meeting of cabinet ministers led by Coordinating Minister for the Economy Darmin Nasution. Other ministers who attended the coordinating meeting were Minister for Energy and Mineral Resources Sudirman Said, top officials from the Coordinating Ministry for Maritime Affairs, Finance Ministry, State Owned Companies (SOEs), Ministry for Spatial Planning and PT Pertamina.
The investment to develop the Bontang refinery is estimated to reach Rp75-140 trillion. The project construction is expected to kick off in 2018.
An Outline Business Case (OBC) of the project has been completed.
The other decision that was made during the cabinet meeting is the approval of Spatial Planning (RDTR) of Bontang town. The decision is needed to finalize the land clearing and compensation of around 300 hectares of land.
The transaction advisor of the Bontang project is the Finance Ministry.
Bontang Refinery project is a greenfield project with potential designed capacity of 235,000 barrels per day.
Earlier, President Joko Widodo signed new Presidential Decree (Perpres) on oil refineries, which will become basis for the development of oil refineries in the country.
Under the ruling, the government offers four options in developing the refineries; namely first cooperation between the government and a business entity; secondly, mandatory of the government funded by the State Budget; thirdly, special duties given to Pertamina; and fourth development of refineries by private sector entity. (*)