Indonesia’s Pertamina, Saudi Aramco to invest $5.5b for upgrading Refinery Unit IV Cilacap

Photo by Pertamina

Indonesia’s state-owned energy company PT Pertamina and a global oil & gas player, Saudi Aramco, have signed a head of agreement (HoA) to upgrade Refinery Unit IV Cilacap in Central Java with an estimated total cost of $5.5 billion.

The project is targeted to be completed and come onstream in 2021.

The HoA was signed by Pertamina’s president director Dwi Soetjipto and president & CEO of Saudi Aramco Amin al-Nasser and witnessed by Indonesian vice president Jusuf Kalla on Thursday, Nov 26, in Cilacap.

The refinery upgrading project is part of Pertamina’s Refinery Development Master Plan.

According to Soetjipto, the project is aimed at boosting the production capacity of the crude distillate units (CDU) of the Cilacap refinery from approximately 345,000 barrels per day (bpd) to 370,000 bpd.

He added that the expansion of projects, set out in the RDMP, comprises of three parts – expansion on the primary unit facility through revamping of CDU II and optimizing the capacity of CDU I; upgrading the secondary unit through revamping of Residual Fluid Catalytic Cracking (RFCC) which will jack up its production capacity to 81,000 bpd from 62,000 bpd at present; and installation of new hydro cracker unit with capacity of 43,000 bpd.

The company will also upgrade the petrochemical unit by boosting the production of paraxylene from 280,000 barrels per day to 485,000 bpd. It will also construct a new polypropylene plant in order to increase the polypropylene output to 153,000 tons per annum.

After signing the HoA, Pertamina and Saudi Aramco will carry out site preparation and basic engineering design in 2016.

If the front-end engineering design (FEED) can be completed in 2017, and the EPC begins in 2018, the Cilacap refinery upgrading mega project could be completed and be operational by the end of 2021.

Finance Director of Pertamina Arif Budiman said the project will be financed through internal cash flow and project finance. He said Pertamina has invited foreign and local bankers to help finance the project through project financing scheme.

The company plans to invest around $4.42 billion this year and 75 per cent of the total investment will be distributed for upstream business.

Soetjipto said the company plans to double its fuel products output to 1.6 million bpd by 2019 to meet the market demand and cut imports.

At present, Pertamina only processed around 1.1 million barrels of oil at its refineries to meet domestic fuel consumption of 1.5 million bpd.

The remaining fuels are imported from Singapore and other countries.

Also Read:

Indonesia state energy firm Pertamina to form JVs with Saudi Aramco, Japan’s Nippon for $10b refinery projects

Indonesia to create Petroleum Fund for financing Pertamina’s upstream, downstream projects

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.