SK Lubricants, Pertamina, and Patra SK signed an agreement to study the potential for API Group II base oil production at Pertaminas 8,600 barrels per day Group I refinery in Cilacap, Indonesia.
With the signing of a Memorandum of Understanding, the three companies have agreed to implement a Group II feasibility study, according to a Pertamina press release.
The study will take into account the technical production aspects as well as market and economic factors of producing Group II base oil at the Cilacap facility, in addition to the plants existing Group I production. The study is expected to be completed in the next six to eight months.
The three companies will then go on to finalize plans to form a joint venture company.
Based in Jakarta, Pertamina is Indonesias state-owned oil and natural gas corporation. Korea’s SK operates a base oil refinery in Ulsan, South Korea, that produces 14,000 b/d of Group II and 26,000 b/d of Group III. Patra SK is a joint venture between the two companies. SK owns 65 percent and Pertamina owns 35 percent of its 10,000 b/d of Group III base oil plant in Dumai, Indonesia.