Saudi Aramco, Pertamina to Jointly Study on Tuban Project

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Monday, 20 February 2012 08:31

Written by Hatman Bintang

DHAHRAN/JAKARTA, Indonesia Today – Saudi Aramco has finally clinched a Memorandum of Understanding with state-owned company, PT Pertamina to jointly evaluate the economic feasibility to build an integrated refining and petrochemical project in Tuban in East Java.

The proposed refinery and petrochemicals project will be designed to process 300,000 barrels per day of crude oil, much of which will be supplied by Saudi Aramco pursuant to a long-term contract. The production will be distributed to meet demands in Indonesian and Southeast Asia.

“This MOU is a significant first step in extending our already strong relationship with Pertamina, and is also part of Saudi Aramco’s strategy to enhance its global downstream presence,” said Dawood M. Dawood, Saudi Aramco’s Vice President of Marketing, Supply and Joint Venture Coordination on a press statement.

Following the MoU signing, a project team will work on the next phase of the project, which will consist of a joint scoping study that will include market research, configuration studies and economic analysis.

Last week, CEO of Pertamina Karen Agustiawan told Indonesia Today that both parties have not decided where the refinery will be built, either Balongan (East Kalimantan) or Tuban (East Java). This is quite a fast response from Saudi Aramco.

Indonesian government has planned to allocate Rp80 trillion of incentive for Saudi Aramco. The number is as big as those allocated for Kuwait Petroleum International Co. in Balongan.

Saudi Aramco has allocated US$200 billion for investment in Indonesia, China, and Vietnam. Most of the fund is intended to double its production in those areas as well as oil & gas exploration for upcoming years. (bintang@theindonesiatoday.com)

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