Interest in Indonesia Energy

Interest in Indonesia Energy
Interest in Indonesia Energy

The Iranian government is looking for opportunities to develop refineries in Indonesia, where demand for oil is growing faster than the ability to secure hydrocarbons.

On Thursday, the representatives of Iran’s energy ministry paid a visit to newly appointed Indonesian Energy and Mineral Resources Minister, Sudirman Said, to discuss the issue.

Acting director general for oil and gas at the ministry Naryanto Wagimin, who accompanied the minister during the meeting, said Iran is interested to invest in Indonesia, particularly in refineries, petrochemicals and liquefied natural gas (LNG).

“It’s still at the initial stage. We will need a further meeting to discuss the realization of their plan. We welcome them and we will have a working group meeting to follow this up,” Jakarta Post quoted him as saying.

Naryanto added that Iran’s oil characteristics suited the country’s oil refinery in Cilacap, Central Java. “Thus, it plans to build a refinery that will be supplied by its crude oil,” he said.

Indonesia has six refineries nationwide that are operated by state-owned PT Pertamina. The refineries are old and are running below full capacity. The country has not built new refineries since 1994, when former president Soeharto inaugurated a refinery in Balongan, West Java. Poor refinery facilities have increased the country’s dependen.

In the deal, NBP also agreed to supply up to 300,000 bpd of crude to be processed in the refineries for a 20-year period.

Pertamina is also increasing its capacity to meet the growing demand of oil and its products. The company is planning to build fuel storages in East Java, Kalimantan, East Nusa Tenggara and Sorong in Papua.

“We will invite the private sector to invest and cooperate with us. We’re planning to have a combined new capacity of 1.5 million kiloliters within five years, which we will either develop by ourselves or with partners,” Pertamina marketing and trading director Hanung Budya said.

He added that his company currently has storage facilities of 5 million kiloliters, in which only 4 million kiloliters could be used. “The demand for fuel is 185,000 kiloliters per day. The 4 million kiloliters capacity is only enough for 21 days,” Hanung said.