Two state-owned companies, PT Pertamina and PT Indonesia Asahan Alumunium (MIND ID) agreed to build Calcined Petroleum Coke - Photo by Pertamina

JAKARTA (TheInsiderStories) – Two state-owned companies, PT Pertamina and PT Indonesia Asahan Alumunium (MIND ID) agreed to build Calcined Petroleum Coke (CPC). The new plant is estimated to operate in 2022 and starts to construct in the third quarter of 2020.

President Director of Pertamina Nicke Widyawati said that the joint venture agreement aims to increase the value of Pertamina’s Green Petroleum Coke (GPC) to be CPC as the main raw material of Inalum’s aluminum melting. Widyawati said Pertamina produced GPC in Dumai Oil Refinery with a capacity of 360,000 a year.

“Pertamina’s GPC has low sulfur, so it is more environment-friendly. Now, GPC is just sold as raw material for domestic and export commodities,” she said.

Beside engaging Inalum, Pertamina also joint with other SOE companies, PT Wijaya Karya Tbk (IDX:WIKA), PT Jasa Marga Tbk (IDX:JSMR) and PT Perusahaan Gas Negara Tbk (IDX: PGAS) to develop natural gas pipeline.

Widyawati said that the cooperation will make Pertamina easier in land acquisition as a step to build energy infrastructure. Also, the natural pipeline will support the fuel distribution in Indonesia’s remote area.

“Pipeline building will strengthening fuel and gas supply in Java, Sumatera, and Kalimantan, as well as speed the fuel distribution to the public,” she said.

To date, Pertamina has built a pipeline that connected the Balongan Refinery to Plumpang in the north of Java Island. While in the south of Java, it has been built the pipeline linked Cilacap Refinery to Semarang and Surabaya soon. Next, Pertamina will build the Cikampek-Padalarang line connected north and south Java.

In Sumatera, Pertamina will build pipeline which linked Plaju Refinery to Jambi and then Dumai Refinery to Siak. In Kalimantan, the company plans to connect RU V Balikpapan Refinery to Samarinda to support capital removal.

Previously, Pertamina granted investment from Abu Dhabi and Taiwan investors to build a petrochemical plant in Balongan Refinery, Indramayu of Rp100 trillion. Widyawati said that the project needs four to five years to complete. They will employ 30,000 to 35,000 local residents and a hundred technicians during the plant’s building.

The investment will be used to build the petrochemical plant that integrated with an existing oil refinery. The capacity of the refinery will be upgraded with petrochemical in it and become the biggest integrated petrochemical plant.

She asserted, Balongan refinery has produced oil 125,000 barrels per day and will upgrade to 350,000 barrels per day after the plant completed. While the petrochemical plant will produce 2.5 million naphthas.

Furthermore, to complete the plant, Widyawati met West Java’s Governor Ridwan Kamil to request license and location placement. As planned, the project will begin at the beginning of 2020 and will operate in 2026.

Meanwhile, Kamil promised he will simplify the investment and the building of the plant. He also appreciated the plant’s building that absorbs 30,000 to 35,000 human resources so it will impact significantly local welfare.

Kamil also plans to upgrade the status of the Balongan Refinery to be a special economic zone (SEZ). Therefore, the government will be easier to support the building of the project.

On the other hand, Pertamina will allocate at least $3.7 billion to develop its upstream sector next year, from the total 2020 budget of $7.8 billion. It includes in the form of exploration and development of work areas managed by Pertamina.

“Starting next year, 60 percent of capital expenditure is for developing upstream assets that we manage,” Widyawati said.

Widyawati claimed to get offers from several oil and gas companies interested in managing the Mahakam Block. Even so, she did not want to disclose information related to companies that have submitted an interest in the block. But the director said Pertamina needed partners in the block.

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