Jakarta (ANTARA News) - Indonesian state-owned oil and gas company PT Pertamina and its Russian counterpart, Rosneft Oil Company, will build and operate a new oil refinery integrated with New Grass Root Refinery and Petrochemical in Tuban, East Java.
"The government has determined the construction site of the refinery in Tuban District, East Java Province. The site was decided following comprehensive studies and considerations, in terms of location, topography, and geological studies," Minister of Energy and Mineral Resources Ignasius Jonan noted in a written statement received by ANTARA here, Wednesday.
However, the construction plan of the refinery is still facing constraints in the form of land acquisition.
To expedite the settlement of the land acquisition issue, the government has appealed to PT Pertamina to resend a team to solve the problem.
"If this problem cannot be solved, the refinery construction site should be moved," Jonan stated.
Meanwhile, President Director of PT Pertamina Nicke Widyawati affirmed that land required for the construction of an 800-hectare refinery is still encountering problems.
At the site where the refinery will be built, 350 hectares of land belongs to the Ministry of Environment, while the rest is owned by the local people.
"Since the last three years, several measures have been undertaken by Pertamina to solve the land acquisition problem. Pertamina has also followed up with the minister of energy and mineral resources` request to send back a team to solve the land acquisition problem. We will immediately send another team to solve this land problem," Widyawati explained.
She added that Pertamina is keen to build a refinery in Tuban due to the presence of a Petrochemical Complex at the site. Construction of the refinery in Tuban had been planned since 2016.
"The government is keen to build the refinery to reduce the imports of fuel oil for meeting the domestic demands, so we cannot wait any longer. We will immediately discuss this plan with the local administration, so that a decision can be taken," Widyawati added.
The Tuban Oil Refinery is a new oil refinery construction project, with a production capacity of 300 thousand barrels per day.
Construction of the Tuban Oil Refinery will use a petrochemical configuration that is integrated with PT Trans Pacific Petrochemical Indotama.
Construction of the Tuban refinery by Pertamina and Rosneft is estimated to cost some US$15 billion.
Reporting by Afut Syafril Nursyirwan
Editing by Libertina, Yoseph Hariyadi