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State-owned oil and gas company Pertamina may spend US$100
million out of its own reserves to partly finance the expansion of its
Cilacap refinery in Central Java.
Pertamina president director Ari Soemarno said Friday that Pertamina
would team up with Japan's Mitsui Corporation to revamp the refinery.
He said that the upgrade, which would cost about US$1.8 billion, would
raise the processing capacity of the refinery by 62,000 barrels per day
from the existing 348,000 barrels per day.
About $500 million will be financed by equity from both Pertamina and
its partner Mitsui, he said, adding that Pertamina would provide at
least $100 million for the project.
"The remaining $1.3 billion for the upgrade will come from the banks,"
he explained.
Ari said that Pertamina and Mitsui were currently negotiating with a
number of international lenders to partly finance the project.
He said Pertamina was considering hiring Korean engineering firm
Chiyoda, Britain-based engineering firm JCC Engineering Ltd., or U.S.
engineering firm Becthel Group Inc. to design the revamped plant.
"We hope that the design will be completed by the end of this year so
that we can start construction early next year," Ari said.
The project is scheduled to be completed in 2010.
Currently, Pertamina operates seven refineries with a total capacity of
1.051 million barrels per day.
Pertamina wants to boost its refining capacity so as to increase its
output, given that the country still imports a third of its oil needs
due to the fact that its refining capacity is not big enough to meet
demand.
Pertamina will import 10.4 million barrels of fuel products in August,
made up of 3.4 million barrels of gasoline, 6 million barrels of diesel
oil and 600,000 barrels of kerosene.
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