On the rise: An attendant refuels a motorcycle at a PT Pertamina petrol station in Pangkal Pinang. The state oil and gas firm aims to process about 330 million barrels of crude oil next year and double its petrochemical output in West Java. — Bloomberg
JAKARTA: Indonesia is ramping up production of domestic fuel and plastic components to meet rising demand and cut reliance on imports.
PT Kilang Pertamina Internasional, a refinery and petrochemical unit of state oil and gas firm PT Pertamina, aims to process about 330 million barrels of crude oil next year, near its pre-pandemic level, and up from 320 million in 2022. President director Taufik Aditiyawarman, said that plans are afoot to double its petrochemical output in West Java and build a new facility in East Java.
“We have not seen any signs of a recession,” Aditiyawarman said in an interview last week. “Demand will keep growing.”
The move will help South-East Asia’s largest economy curb fuel imports that now account for about half of the national demand.
This year’s consumption of Pertamina’s most-used gasoline grade, known as Pertalite and gasoil, is expected to exceed government projections as economic activity picks up after the pandemic. Crude oil intake fell by almost 8% in 2020 and a further 10% in 2021 at the height of the pandemic to 301 million barrels.
Pertamina wants to double its secured supply of crude oil to 50 days from 21 as refinery capacity expands and the economy rebounds.
Fuel consumption is forecast to steadily increase before peaking at 1.5 million barrels per day in 2030, as the nation moves towards its 2060 net-zero emissions goal.
“Kilang Pertamina is upgrading the quality of fuel produced at Dumai and Plaju refineries in Sumatra, Balikpapan in Borneo and Cilacap in West Java from Euro 2 to Euro 4,” said Aditiyawarman.
“Grassroot refinery development in Tuban, a joint venture project with Rosneft Oil Co, is entering the stage for preparation of engineering, procurement and construction.
“Pertamina is studying an opportunity to buy Russian crude oil at cheaper prices while also getting offers from countries in West Africa,” he added.
On petrochemicals, he said: “Kilang Pertamina will double polypropylene output to 600,000 tonnes a year at the Balongan plant in West Java and develop a new integrated petrochemical complex in Tuban in East Java.
“The plants will help the company switch production from fuels to raw materials for plastics and other products at a time when fossil fuel consumption starts to decline.
“Kilang Pertamina is exploring an opportunity with state-owned plantation company PT Perkebunan Nusantara III for the supply of palm oil mill effluent to the biofuel refinery in Plaju.” — Bloomberg
