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Pertamina commissions joint study on Dumai oil refinery upgrade

Pertamina commissions joint study on Dumai oil refinery upgrade
Photo courtesy of Pertamina

PT Pertamina last week signed a memorandum of understanding (MoU) with Indonesian state construction firm PT Nindya Karya (Persero), and South Korea’s DH Global Holdings Co. Ltd., to conduct a joint study on the Dumai oil refinery upgrade project.

The MoU specifically aims to explore the business opportunities of cooperation in the Processing Unit II Refinery Development Master Plan (RDMP) Dumai.

The Dumai Processing Unit II RDMP project is important because it is one of the several priority RDMPs of PT Pertamina, said the Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia, who witnessed the signing virtually.

Pertamina owns six refinery units with a combined capacity of 1.046,70 thousand barrels.The Dumai oil refinery has an installed capacity of 170,000 barrels per day (bpd).

“The project with a value of USD1.5 billion can increase domestic oil and fuel production capacity, so that it will reduce the dependence on Indonesian oil imports which are expected to be able to overcome the current account deficit going forward. The refinery development megaproject, in this case the RDMP of the Dumai Processing Unit II, is expected to run well and can provide a multiplier effect on equitable development in Indonesia as a whole,” he said.

The MoU was signed by PT Nindya Karya (Persero) represented by Moeharmein Director of Marketing & Development Zein Chaniago, PT Pertamina (Persero) was represented by the Director of MegaProject Refinery & Petrochemical/Director of Processing and Petrochemical Megaprojects Ignatius Tallulembang and the Korean Consortium was represented by the Chairman of DH Global Holdings Jung Sam Seung.

The Head of BKPM in his remarks conveyed that this cooperation initiative was initiated during his visit to South Korea at the end of 2019. “We thank the parties for embodying this collaborative initiative, from PT Nindya Karya (Persero), PT Pertamina (Persero) and the Consortium South Korea. I hope that investment can have a strategic meaning where the current price of oil is falling and the atmosphere is conducive due to the Covid-19 pandemic we are facing together.”

Tallulembang said that he would fully support the implementation of this collaboration and expressed his confidence to Nindya Karya as one of the BUMNs engaged in the construction, “bearing in mind that these projects are strategic projects with substantial investment value, which is also our country’s roadmap for realizing energy security programs.”

“With this agreement, Nindya Karya and the South Korean consortium have become Pertamina’s strategic partners in conducting the study on the Dumai refinery upgrade. Our company hopes an important milestone can be achieved in December,” Tallulembang said.

The RDMP lays out a road map for upgrading four refineries located in Dumai, Riau; Balikpapan, East Kalimantan; Cilacap, Central Java; and Balongan, West Java. The Grass Root Refinery program details Pertamina’s plan to construct two new production facilities in Tuban, East Java; and Bontang, East Kalimantan.

In October 2016, Pertamina formed the Directorate of Refinery and Petrochemicals Mega Projects (MP2) focusing on addressing the mega projects which consist of the revitalization program of existing refineries (Residual Fuel Catalytic Cracking/RFCC Cilacap projects, Project Blue Sky Cilacap/PLBC, and Project Refinery Development Master Plan/RDMP at Balikpapan, Cilacap, Dumai and Balongan refineries, and the construction of new refinery (Grass Root Refinery/ GRR). Based on the roadmap of increasing the capacity of Pertamina refineries, the fuel production target after the completion of RFCC, PLBC, RDMP and New GRR projects will be two million bpd by 2025.