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Pertamina to cut some refinery projects in energy transition
The state-owned energy giant is adjusting its business development plan in line with the country's energy transition.
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Pertamina's Balikpapan refinery as seen on Jan. 8, 2022 (Pertamina/Pertamina)
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tate-owned oil and gas holding company Pertamina has decided to slash its refinery development plans as it diversifies away from oil-based fuels as part of its energy transition strategy.
Pertamina CEO Nicke Widyawati announced on Tuesday that the company had canceled its plans to build a new refinery in Bontang, East Kalimantan, which was to be one of two new refineries under the grassroots refinery (GRR) project.
She added that Pertamina would focus resources on three refinery upgrade project in its refinery development master plan (RDMP), instead of the initial four. The RDMP covers the Balongan, Balikpapan, Dumai and Cilacap refineries. She did not mention which one would be excluded.
"From four RDMP and two GRR [projects], we will focus on three RDMP and one GRR [projects], but all [will be] integrated with petrochemicals. Integrating with petrochemicals is safer for the future sustainability of our business,” Nicke told lawmakers on Monday at a meeting with House of Representatives Commission VI, which oversees trade and investment.
The decision was based on a Pertamina study that projected fuel oil would comprise only 20 percent of Indonesia’s total energy mix in 2050, down from currently 31 percent. Its projections showed that coal would also decrease while natural gas would rise slightly, but the greatest increase would be renewables.
“With the government’s policy to push renewables development, we are reviewing whether we still need those refineries,” Nicke said.
Read also: Pertamina considers buying Russian crude oil: CEO
