PETRONAS and PT KPI explore new lube base oil plant in Indonesia

PETRONAS Lubricants International (PLI) and PT Kilang Pertamina Internasional (PT KPI) have entered into a joint study agreement (JSA) to consider building a greenfield lube base oil facility in Refinery Unit (RU) IV Cilacap, Central Java, Indonesia.

Base oils are essential for formulating products like greases, motor oil, and metal processing fluids.

This partnership aims to conduct an in-depth technical and feasibility analysis. The anticipated facility is expected to meet the needs of the Indonesian market and the expanding markets in regions like China and Southeast Asia. A final investment decision regarding this project is planned in 2025.

During the agreement’s signing, Hezlinn Idris, managing director and Group CEO of PETRONAS Lubricants International, said, “This JSA aligns with our strategic vision to enhance our current high-grade lube base oils portfolio. By joining forces, we aim to capitalise on our combined strengths, expertise, and distribution networks, ensuring efficient customer outreach. We are optimistic that this collaboration will unlock new market opportunities and solidify our position as regional leaders in lubricant technology.”

Johan N.B. Nababan, director of Business Planning & Development at PT Kilang Pertamina Internasional, commented, “Collaborating with PETRONAS Lubricants International is a significant step for us. We’re eager to explore synergistic opportunities to broaden our regional footprint. The lubricant technology sector holds immense growth potential, and we’re confident that this partnership will pave the way for future innovations.”

PT KPI, a subsidiary of PT Pertamina (Persero), is a pivotal refining and petrochemical entity in Southeast Asia. It specialises in transforming oil, natural gas, biofuels, and other resources into essential products like fuel, lubricants, petrochemicals, and pharmaceuticals.

The proposed refinery will utilise raw materials from the existing RU IV Cilacap, with a production capacity of up to 800 tonnes per day of high-grade lube base oils. Additionally, it will produce supplementary products like diesel fuel, naphtha, and LPG.