Upgrade Planned for Cilacap Base Oils

Base stocks produced at a Pertamina refinery in Cilacap, Indonesia, would be upgraded as part of a multi-billion retrofit agreed to by the Indonesian oil company and Saudi Aramco.

The companies signed a heads of agreement Nov. 26 representing a deal in principle to cooperate on a U.S. $5.5 billion two-phase project. The first phase would include expanding the refinerys crude distillation units to increase its overall capacity to 370 million barrels per day. The second phase would install a 43,000 b/d hydrocracker that would allow production of higher quality base stocks. The companies have targeted a completion date in 2021.

The Cilacap refinery already includes a base oil plant with capacity to produce 425,000 metric tons per year of API Group I stocks. The companies did not offer further information about the volume or quality of stocks that would be produced after the project, and it is possible that such details have not been determined since the Basic Engineering Design Study for the project is not due to be completed until the end of 2016.

Steve Ames, of U.S.-based SBA Consulting, said the hydrocracker could allow production of Group II or III base oils depending on its specifications.

Given Pertaminas existing joint venture with SK at its Dumai [Indonesia] refinery already makes Group III+ oils, I would assume the Cilacap base oil upgrade to be Group II quality, Ames speculated. If so, that would imply the new hydrocracker would be a mild-severity operation. At 43,000 b/d feed, a mild hydrocracker could produce as much as 900,000 t/y of Group II base oils. If the hydrocracker is a high-severity operation, it could produce around 350,000-375,000 t/y of Group III.

Ames also guessed that the Cilacap refinery would close at least one of the three production trains at the existing base oil plant in order to provide vacuum gas oil feedstock for the upgraded base oil facility.

Last weeks agreement calls for Pertamina and Aramco to jointly own and operate the upgraded facilities. It also includes a long-term agreement for Aramco to supply crude oil to the refinery. Pertamina has traditionally depended on waxy sweet Indonesian crude, but those supplies are waning. Aramco supplies sour Middle Eastern crude.

In addition to being the worlds largest crude producer, Aramco operates fuel and chemical refineries in Saudi Arabia. It also holds ownership shares in other refineries around the world, including U.S. and South Korean refineries that include base oil plants. The Saudi company has stated its desire to expand its operations in chemicals and base oils.