MOSCOW (MRC) -- Indonesia's state-owned oil company Pertamina and Saudi Aramco finalized an agreement on a USD5 billion expansion of Indonesia's largest oil refinery in Central Java, said Saudi Aramco in its press release.
The two companies will establish a joint venture for the project, in which Pertamina will own a 55% stake. The upgrade will increase the refinery's capacity from 348,000 barrels per day to 400,000 barrels per day. Saudi Aramco will supply most of the crude oil for the refinery. The project is scheduled to be completed in 2021.
The expansion will "help Pertamina to enhance its downstream competitiveness," said Dwi Soetjipto, the company's president. It will also increase the refinery's capacity in derivatives such as petrochemicals.
The move follows a preliminary agreement reached last year. Indonesia, a net oil importer, is expanding its refineries to meet growing domestic demand. Saudi Arabia, meanwhile, has been seeking stable revenue amid low crude prices and competition from other oil producing countries.
As MRC informed earlier, Pertamina and Russia's Rosneft signed a framework deal this week on an oil refinery in Indonesia. Pertamina has been looking for a development partner for the USD12-billion Tuban refinery project.
Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).
Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world's most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC