Wednesday, 24 April 2019 | 10:59 WIB

SOE Minister: Balikpapan Refinery Project Can Create 14,000 Jobs

Indonesia SOE Minister Rini Soemarno (left) and Pertamina President Director Nicke Widyawati (right) (twitter/pertamina)

JAKARTA, NNC - State-owned energy company Pertamina and a consortium have signed a contract for the Engineering, Procurement and Construction (EPC) of the Balikpapan Refinery Development Master Plan (RDMP).

This consortium consists of SK Engineering & Construction Co.Ltd as consortium leader, Hyundai Engineering Co. Ltd, Rekayasa Industri, and state-owned construction company Pembangunan Perumahan (IDX:PTPP).

The contract includes the construction of refineries in both Inside Battery Limit (IBL) and Outside Battery Limit (OSBL), with a contract value of IDR57.8 trillion. The contract is expected to be completed within 53 months.

Indonesia Minister of State-Owned Enterprises (SOE) Rini Soemarno said the construction of Balikpapan Refinery RDMP is part of Pertamina's strategic project which will have an important role in realizing national energy independence and security.

She said the Balikpapan refinery RDMP project will encourage Pertamina to increase refinery crude oil processing capacity from 260,000 barrels per day to 360,000 barrels per day, as well as improving the flexibility to process more economical crude oil with higher sulfur levels of up to two percent.

"This project will also utilize up to 14,000 workers at peak times. Pertamina has encouraged us to optimize the use of local workers. It is expected that Balikpapan's RDMP Refinery will have a multiplier effect for both regional and national economies," Rini said in a press release in Jakarta, on Monday (10/12).

Rini continued that when Balikpapan's RDMP operates at full capacity, gasoline production will increase by 100,000 barrels per day, while diesel production would rise by 40,000 barrels per day. Therefore, the import needs of gasoline and diesel can be significantly reduced.

"The refinery will also support the government's program in limiting National motor vehicle exhaust emissions, because, Balikpapan's RDMP Refinery will be focused on increasing quality and environmentally friendly fuel production in accordance with Euro V standards," she explained.

Later, Balikpapan's refinery capacity will grow by 100,000 barrels per day, up 38 percent from the previous 260,000 barrels per day to become 360,000 barrels per day. In addition, Balikpapan's RDMP Refinery will also produce new propylene products of 230,000 tons per year.

Balikpapan RDMP is one of six refinery mega-projects built by Pertamina. The six refinery megaprojects consist of four refinery development master plans (RDMP) and two new development projects (grass root refinery/GRR).