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Pertamina Balikpapan refinery upgrade to finish in 2024
State-owned oil giant Pertamina has secured equipment and a land-use permit to ensure the Balikpapan refinery upgrade will finish on time.
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tate-owned oil giant Pertamina has secured equipment and a land-use permit to ensure the Balikpapan refinery upgrade will be finished on time.
Progress on the project in Balikpapan, East Kalimantan, which is part of the refinery development master plan (RDMP), amounted to 47 percent in December 2021.
The revamp of the main production unit is slated to finish by October 2023, while the facilities for residual fluid catalytic cracking (RFCC) and gasoline block production are targeted to be finished by March 2024 and November 2024, respectively.
Pertamina president director Nicke Widyawati expressed optimism about completing the project on time, noting that Pertamina had addressed major issues that would affect the project progress, including land use permission and engineering.
“Pertamina continues to pursue the project’s completion to increase [refining] capacity and improve refinery processing,” Nicke told reporters at the RDMP Balikpapan project site on Saturday.
RDMP Balikpapan construction began on Dec. 10, 2018, with the signing of an engineering, procurement and construction (EPC) contract.
The construction is being carried out in cooperation with four domestic and foreign companies, including South Korea’s Hyundai Engineering Co. Ltd. and SK Engineering and Construction Co. Ltd. as well as state-owned construction companies PT Rekayasa Industri and PT PP.
Read also: Pertamina loses partners, eyes new investors for refinery megaprojects
Nicke said that, most often, delays in refinery projects were caused by procurement problems related to long lead items, a term that refers to equipment with delivery times long enough to affect overall project lead time directly.
Due to the pandemic, delivery of some equipment was delayed. “Europe and the United States were locked down, so some equipment production there had to be stopped temporarily,” Nicke said.
“We have mitigated the biggest delay [risk] factor for this project, because the long lead item installation is [almost done],” she added.
Pertamina is currently working on several multibillion-dollar refinery projects. The refineries, once completed, are expected to double Indonesia’s fuel output, enabling Pertamina to meet the country’s growing transportation fuel demand without raising fuel imports.
The RDMP Balikpapan project aims to increase processing capacity from 260,000 barrels per day (bpd) to 360,000 bpd, increase gasoline production by building an RFCC facility and improve product quality from Euro II to Euro V.
Once the upgrade is completed, the Balikpapan refinery production capacity for gasoline, gasoil and avtur will increase by 229, 36 and 41 percent, respectively.
“As of today, the Balikpapan refinery produces 37,000 barrels of gasoline, 114,000 barrels of gasoil and 29,000 barrels of avtur per day,” Djoko Priyono, president director of PT Kilang Pertamina Internasional, said on Saturday.
