Indonesian, Omani oil companies develop grass root refinery in Bontang

11 December, 2018 | Source: Antara News

Indonesian oil and gas company Pertamina and Omani company Overseas Oil & Gas (OOG) here on Monday expressed commitment to developing the Grass Root Refinery (GRR) project or constructing a new refinery in Bontang, East Kalimantan.

This commitment was voiced in a framework agreement between the two companies, asserting that they will build a refinery, with a capacity of 300 thousand barrels per day, and a petrochemical plant in Bontang, East Kalimantan.

OOG is a company from Muscat, Oman, offering downstream oil and gas business services, with business scope including providing services in commercial structure (development), designing services with experienced personnel, providing construction and project management, covering operations and maintenance, and offering solutions for engineering and construction designs.

OOG was selected as Pertamina`s partner after clearing a partner selection mechanism for the Bontang GRR in January 2018.

The OOG attained the strategic partner status to work on this project with Pertamina after competing with several other competitors.

Pertamina`s Deputy President for Corporate Communication Adiatma Sardjito stated that Pertamina will derive several benefits from this cooperation project, one of which is optimizing capital expenditure to conduct other refinery expansion and construction projects, for instance, in Balikpapan in East Kalimantan, Cilacap in Central Java, Balongan in West Java, and Tuban in East Java.

Pertamina will also act as the off-taker in the fuel produced by GRR Bontang to meet domestic needs, especially of gasoline, aviation turbine, and liquefied petroleum gas.

"With the signing of the framework agreement with OOG today, we can advance the project to the next level, which is to conduct a Bankable Feasibility Study. This study will offer us a better understanding of the technical configuration of the refinery and the economical calculations of the project. This study will also recognize the risks that should be anticipated early since the project is started that is timely. Hence, the project is expected to run within the scope of the budget and focus on specifications, regulations, and economic targets," Adiatma explained.

Meanwhile, Pertamina`s President Director Nicke Widyawati emphasized that the most important aspect about this cooperation was the intergovernmental business scheme, or G-to-G.

The framework agreement will be valid for 12 months. The agreement will be continued with a Bankable Feasibility Study and Advanced Energy Study.

 

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