MOSCOW (MRC) -- PT Pertamina and Saudi Aramco aim to finalize a deal in the first quarter of 2020 as they discuss a new plan for their joint venture, reported Reuters with reference to the Indonesian energy firm’s chief executive.
A plan to upgrade the Cilacap refinery in Central Java has been under discussion since 2016 but the two firms have failed to agree over pricing the project.
Their latest approach could see them form a joint venture company (JV) focused only on a planned additional facility at the site, CEO Nicke Widyawati said, instead of an initial plan that called for a JV that would involve all of the Cilacap facilities.
Pertamina would continue to operate the existing refinery and pay processing fees to the JV under the new plan under discussion, she said.
"This is what we are discussing now and we have set a target that in the first quarter next year this (negotiation) must be concluded," she said.
The expansion aims to increase Cilacap’s refining capacity to 400,000 barrels per day from 348,000.
A Pertamina official in April said that if a deal with Aramco is not reached, the state-run company is prepared to launch the project on its own to meet its 2025 operational target.
Pertamina is also considering finding a new partner for its USD10 billion refinery project in Bontang, East Kalimantan.
Pertamina signed a framework agreement in 2018 with Oman’s Overseas Oil and Gas LLC (OOG) to develop a refinery and petrochemical complex in Bontang.
Widyawati did not elaborate on the reasons for looking for a new partner for the Bontang project.
As MRC informed earlier, in September 2018, Eni and PT Pertamina (Persero) signed in Porto Marghera, at Eni Green Refinery, a Memorandum of Understanding further expanding the relationship into green refinery.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
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.
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