Pertamina, Saudi Aramco to increase capacity of Cilacap refinery

Jakarta (ANTARA News) - Indonesias state-owned energy company PT Pertamina has agreed to partner with Saudi Aramco to maximally develop the capacity of the oil refinery in Cilacap, Central Java.

"We will remain the majority shareholder in the joint venture. Pertamina will hold 55 to 60 percent of the shares," Pertaminas President Director, Dwi Soetjipto, stated here on Tuesday.

At the Pertamina Energy Forum 2015 event, Dwi noted that the agreement will be signed on November 26, 2015.

Dwi further affirmed that once the cooperation agreement is inked, the production capacity of the refinery in Cilacap will be increased from 260 thousand barrels per day (bpd) to 360 thousand bpd.

He remarked that Pertamina will increase its capital to hold 55 percent of the shares.

The investment in the joint venture amounts to US$5.5 billion, which comprises assets and cash money. Pertamina will contribute US$3.02 billion to US$3.3 billion.

Dwi stated that the initial investment will only be around 15 percent to be allocated for engineering, while the rest will be disbursed in stages.

Octane 92 or RON 92 gasoline will be produced by the Cilacap refinery.

"If the market demand for RON 88 is high, we will also produce it," he noted.

Under the agreement, both Saudi Aramco and Pertamina will be able to carry out exports based on their respective share, but only if there is surplus production.

Surplus production is possible only if several people invest in refineries in Indonesia, and the potential opportunity for it always exists, he claimed. (*)