Pertamina Starts Construction of $1.4 Billion Cilacap Unit

PT Pertamina, Indonesia’s state oil company, started construction of a $1.4 billion fuel-processing unit at its Cilacap refinery in Central Java to reduce reliance on imports of petroleum and petrochemical products.

The residual fluidized catalytic cracker will have a daily capacity of 62,000 barrels and will start operations in the third quarter of 2014, Pertamina President Director Karen Agustiawan said today at a press briefing in Cilacap.

Indonesia, Southeast Asia’s biggest crude oil producer, is boosting investment in refineries to help cut the nation’s dependence on imports of oil products. The country imports diesel, gasoline and jet fuel because its refining capacity lags behind consumption.

“We still need imports of 12 million kiloliters of low- octane gasoline and 3 million kiloliters of diesel oil annually,” Agustiawan said. “It tends to increase in line with growing consumption of fuel.”

The new unit, which will produce high-octane gasoline and liquefied petroleum gas, will increase Pertamina’s annual gasoline production by 1.9 million kiloliters, she said.

Cilacap, Pertamina’s largest oil refinery, has total daily capacity of 348,000 barrels currently, Pertamina said in a statement.

Pertamina produces 40.6 million kiloliters of petroleum products including low-octane gasoline, diesel oil and kerosene from its six refineries every year, the Jakarta-based company said in a statement today.

Pertamina plans to boost output of oil products to 66.7 million kiloliters in 2018 by revamping existing plants and building two refineries, Processing Director Edi Setianto said.

Indonesia’s fuel consumption may grow 4 percent every year from 56 million kiloliters currently, according to Pertamina. The state-oil company supplies around 73 percent of the country’s total fuel consumption.

To contact the reporter on this story: Fitri Wulandari in Jakarta at fwulandari@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net.

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