Indonesia will study a proposal from Iran to build an oil refinery, as it seeks to expand its oil refining capacity by 500,000 barrels per day (bpd) in the next seven years. Iran has proposed to build an oil refinery in Java, Indonesia with a processing capacity of more than 100,000 barrels per day (bpd), said IGN Wiratmaja Puja, director-general of oil and gas at Indonesia’s Ministry of Energy and Mineral Resources. The project is estimated at USD 8.4 billion, Iran’s state-run news agency Mehr reported, citing Hassan Khosrojerdi, head of the joint Iran-Indonesia refinery’s board of directors.
Iran, which is seeking to boost crude oil exports after international sanctions were eased in January, will supply crude oil to the proposed refinery.
Iran is now conducting a project feasibility study, a spokesman for Iran’s oil ministry said.
Indonesia is building four refineries, ranging in capacity between 300,000 and 350,000 bpd each.
Indonesia currently imports 800,000 to 900,000 bpd of crude oil. Minister of Economic Affairs and Finance Ali Tayyebnia said Iran can supply Indonesia with 200,000 bpd of crude oil. State-owned oil and gas company Pertamina plans to import one million barrels of Iranian Light crude oil in the third quarter to test the crude oil at a refinery in Central Java. Energy and Mineral Resources Minister Sudirman Said has stated that Indonesia was interested in long-term crude oil supply deals with Iran to meet the country’s rising crude oil demand.