Indonesia’s state-owned oil and gas company PT Pertamina and Russia’s Rosneft Oil Co. have signed a joint venture agreement to develop a new refinery in Tuban in East Java, Pertamina said in a statement.
The joint venture, in which Pertamina will have a majority stake, will invest USD15 billion to build a new refinery and petrochemical plant with a production capacity of 300,000 barrels per day (bpd).
The joint venture, PT Pertamina Rosneft Pengolahan dan Petrokimia (Indonesia), was established in accordance with the agreement signed in October 2016. Rosneft will receive a 45% stake in the joint venture while Pertamina will own the majority stake of 55%.
Rosneft and Pertamina have conducted the project feasibility study and moved to basic engineering and design (BED) of the refining complex, Rosneft said.
“The attractive market conditions of Indonesia and the expected consumption growth enabled the working group of Rosneft and Pertamina to develop a competitive concept of the new refinery and petrochemical complex. The parties confirmed possibility of arranging project financing after bankability study performed with the international financial institutions,” it said.
The planned refining capacity is 15 million tonnes per year and the targeted capacity of the petrochemical complex is more than 1 million tonnes per year of ethylene and 1.3 million tonnes per year of aromatics. The feedstock for TGRR will be medium and heavy sulfur crude oil grades. The crude oil terminal will be able to accommodate VLCCs of up to 300,000 tonnes.