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Pertamina Assesses Transfer of Bontang Refinery Location


PT Pertamina (Persero) is reviewing the transfer of the location of the Bontang Refinery Project with a capacity of 300 thousand barrels per day (BPD) to Arun, Aceh or Kuala Tanjung, North Sumatra. The relocation of the refinery location because the company is targeting the international market.

Heru Setyawan, Director of Investment Planning and Risk Management, said that there were several locations considered by her to be the location of the construction of this new grass root refinery / NGRR. However, his party has not confirmed the chosen location because it is still conducting studies.

"We have plans to move the Bontang refinery, one of the locations from Bontang, Kuala Tanjung and Arun. So there is another study, "said Heru Setyawan.

Heru Setyawan explained, the consideration of moving the location of the Bontang refinery was because the existing infrastructure at the current location in Bontang, East Kalimantan was also used by other companies. On the other hand, the company is trying to optimize the use of existing assets. In addition, relocation also takes into account the availability of land and markets.

"Because Kuala Tanjung is close to the market, there is land. Because there is near the international market, then in Sumatra there is also a market, "said Heru.

Overseas Oil and Gas LLC (OOG)

Before deciding on the relocation of the Bontang Refinery, it still has to complete several agreements with its previous partners namely Overseas Oil and Gas LLC (OOG). He said he decided not to continue working with the oil and gas company from Oman.

"We propose to be revoked, terminated, but this must be an agreement between the two parties," he explained.

Therefore it will look for new partners to build this refinery project. While selecting partners, the Bontang Refinery work will continue. The selection of partners has already begun by Pertamina right now.

Previously, Pertamina Corporate Communication Vice President Fajriyah Usman revealed, his party no longer partnered with OOG in the Bontang Refinery Project because the framework agreement signed by the two companies had ended in December 2019. The Company no longer continued cooperation because OOG's performance was not in accordance with its commitments.

The operation of the refinery is still ongoing. This year it will complete the Bontang Refinery study location, feasibility study / FS, and search for partners.
The company also plans to start the general engineering design / GED engineering work in 2020. The latest development, OOG has signed a memorandum of understanding on the construction of the Bontang Refinery facility with PT Meta Epsi and PT Sanurhasta Mitra Tbk (MINA).

The two companies will build supporting facilities (outside battery limit / OSBL), such as pipes, water treatment facilities, and fabrication. In addition, OOG has conducted open bidding in Singapore to engineering companies with a good reputation for conducting a financial feasibility study on 30 April.

Pertamina plans to accelerate the Bontang Refinery Project by combining the front end engineering design / FEED package auction and engineering, procurement, and construction / EPC. On the other hand, the company monitors OOG's efforts in seeking project funding.

Luhut Binsar Pandjaitan

Because this project's investment of US $ 1015 billion will all be borne by partners. Maritime and Investment Coordinating Minister Luhut Binsar Pandjaitan had encouraged Pertamina to partner with oil and gas companies from the United Arab Emirates for the construction of the Bontang Refinery.

    At that time Luhut said that Pertamina's partners could have been replaced if the performance was not good. The reason is, even though the project was agreed upon several years ago, this project has not yet been completed.

ADNOC

"We want to replace the company from Oman, maybe with Abu Dhabi, ADNOC or other companies," said Ruhut Binsar Pandjaitan.

Investor Daily, Page-9, Thursday, March 5, 2020
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