Upgrade of Cilacap Refinery Delayed

Upgrading of Indonesias base oil producing Cilacap refinery is delayed due to ongoing negotiations for the formation of a new joint venture between Pertamina and Saudi Aramco for the implementation of the upgrade.

State-owned oil and gas company PT Pertaminas officials told local media last month the upgrading of its Cilacap Refinery in Central Java was expected to be completed by 2024. The companys initial target for commercial production to begin was 2021.

According to local media reports, Pertamina officials said they plan to form ajoint venture with Saudi Aramco this year before calling for a tender for the engineering, procurement and construction of the upgrade.

Local media also reported officials stating that the plant will produce API Group II base oils after the upgrade.Neither company responded to emails or phone calls from Lube Report. Officials at the plant also declined comment on the possibility of an upgrade when contacted in June last year.

The refinery has an existing base oil plant with capacity to make 450,000 metric tons per year of Group I base oil.

In 2015, the heads of the companies signed an agreement to cooperate on the U.S. $5.5 billion two-phase project. The first phase includes the expansion of the refinerys crude distillation units to increase through-put capacity from 348,000 b/d to 370,000 b/d. The second phase would install a 43,000 b/d hydrocracker for the production of higher quality base stocks for the domestic market, and expand aromatics and polypropylene production to more than 600,000 tons and 160,000 tons per year, respectively.

The upgrade of the Cilacap Refinery is part of a master plan by Pertamina to upgrade refineries in Cilacap, Central Java; Balongan, West Java; Dumai, Riau; Balikpapan, East Kalimantan; and Plaju, South Sumatra.