Indonesia Will Increase Oil Refinery Capacity


The government will increase the capacity of oil refineries in Indonesia. This is good news because it has been decades since the capacity of oil refineries in Indonesia has not increased.

Later, the capacity of domestic oil refineries will increase by 425,000 barrels per day (BPD) to 1.425 million BPD from the current capacity of only 1 million BPD.

This news was confirmed by Pertamina President Director Nicke Widyawati. She said the additional refinery capacity came from a new refinery project (Grass Root Refinery / GRR) and improvements to the quality and specifications of the existing refinery or the Refinery Development Master Plan (RDMP).

The additional refinery capacity is targeted to be fully operational by 2027, with one of the projects, namely the Balongan RDMP, targeted for completion this year. Thus, it can increase the capacity of the refinery by 25 thousand barrels per day (BPD).

She admitted that this additional refinery capacity was lower than the initial target to increase the refinery capacity to 2 million BPD.

The reduction in capacity from this initial target was triggered by the portion of national use of fuel oil (BBM) in 2050 which will be reduced to 20%.

Therefore, the company revised its target to increase its crude oil processing capacity to 1,425 million BPD from the previous 2 million BPD.

Currently, the full capacity of Pertamina’s refineries is 1 million barrels per day (BPD) with an average operational capacity of around 800 thousand BPD.

Furthermore, Nicke explained, the reduction in the target for additional refinery capacity was carried out following a policy push to make the transition to clean energy. Thus, this also had an impact on the planned construction of a new refinery project in Bontang, East Kalimantan, with a capacity of 300 thousand BPD which was eventually canceled.

“On that basis, we reviewed the plan for the development of four RDMP and two GRR. With the policy regarding the development of New Renewable Energy (EBT), we reviewed the needs of the refinery, so that two years ago there was only one new refinery, which was canceled in Bontang. ,” she said in a Hearing Meeting (RDP) with Commission VI DPR RI, Monday (29/3/2022).

At the very least, the company will only focus on completing five refinery projects, including one GRR project in Tuban and four RDMP projects, namely the Balikpapan, Cilacap, Balongan, and Dumai refineries. Several refinery projects are targeted to be fully completed by 2027.

Nicke detailed that the additional capacity of 425,000 barrels per day will be obtained from the additional capacity of 100 thousand barrels per day from the Balikpapan Refinery RDMP. Then, 25 barrels per day from the RDMP Balongan refinery, and 300 thousand barrels per day from the Tuban refinery.

Furthermore, in addition to increasing the capacity of the refineries, the quality of the products from these refineries will also increase from the current EURO II standard gasoline quality, which will later increase to EURO V standards which are more environmentally friendly.