Indonesia to boost refinery capacity by 70%

Indonesia’s state oil and gas firm PT Pertamina has announced plans to raise its refinery capacity by 70%, in an effort to curb costly oil product imports from China. Pertamina’s nine refineries have a combined capacity of around 1 million barrels per day, but only supply 70% of domestic oil product consumption. Imports make up the deficit. Expansion projects are being considered for Cilacap (60,000 bpd), Balikpapan (40,000 bpd) and Dumai (50,000 bpd), as well as new refineries in Balongan (200,00-300,000 bpd), Banten (150,000 bpd) and Tuban (200,000 bpd). Indonesia has previously signed initial agreements with countries such as Iran and China on new refineries, but so far none has materialized. Investors are discouraged by high investment costs and low margins due to subsidized fuel sales. (November 26, 2010)