THREE COMPANIES TO BUILD OIL REFINERY

Jakarta, July 31 (ANTARA) - Three companies signed a document for the establishment of a joint venture company PT Banten Bay Refinery that will build an oil refinery in Bojanegara, Banten, West Java.

The director of processing of state-owned oil and gas company Pertamina, Rukmi Hadihartini, said here on Thursday the construction of the project with an investment of US$4 billion was aimed at helping the government ensure domestic fuel oil supply resilience.

"We hope for the support from all parties concerned in the realization of the project," she said.

The signing was done after several delays due to STX Pan Ocean Co.Ltd.'s plan to join the consortium.

STX however has asked to be the majority shareholder in the project while the government has also asked Pertamina to be the majority shareholder.

Banten Bay Refinery is a joint venture company of three countries Indonesia (Pertamina), Iran (National Iranian Oil Refining and Distribution Company-NIORDC), and Malaysia (Petrofield).

Pertamina will hold 40 percent of the shares in the refinery that is expected to have a capacity of 300,000 barrels a day, NIORDC 40 percent, and Petrofield 20 percent.

At the initial stage, the refinery will be built to process 50 percent Iranian Extra Heavy Crude and 50 percent Iranian Heavy Crude at a capacity of 150,000 barrels a day, to be supplied by Iran.

The first phase of the construction of the refinery is expected to start in 2010 while production is expected to start in 2014.

The plant is designed to produce gasoline 90/95, diesel oil, fuel oil, avtur, LPG, coke, sulphur and petrochemicals, and 70 to 100 percent of it to be prioritized for the domestic market and the rest for exports in line with standards of Euro IV.

The refinery built on land belonging to PT Pelindo II will receive 110 MMSCFD of gas from PT PGN Tbk and PT BAGS and 5.0 MW of electricity from PT PLN.