JAKARTA: Energy giant Saudi Aramco is ready to supply up to 270,000 barrels per day (bpd) of crude oil to a refinery it will jointly upgrade with Indonesia's Pertamina , chief executive of the Southeast Asia state-owned energy company said on Monday.
Forecasting growing crude oil demand, Saudi Aramco is seeking to invest further in Indonesia's refining and petrochemicals sector, part of broader expansion plans in China, India, Vietnam and the United States.
Saudi Aramco and Pertamina on Monday signed an engineering and project services contract with Amec Foster Wheeler, which will undertake the basic engineering design for the $5 billion upgrade to the Cilacap refinery in Central Java.
"Aramco is determined to make Cilacap refinery the best in Asia," Pertamina CEO Dwi Soetjipto told reporters.
Pertamina is to take 55-60 percent of the refinery joint venture, with Saudi Aramco taking the remainder, he said. Completion of the plant upgrade is targeted for end-2022.
Saudi Aramco currently supplies around 125,000 bpd of crude to Cilacap, meeting about one-third of its crude needs. The upgrade calls for an increase in processing capacity to 370,000 bpd from 348,000 bpd at present, and will include a new hydro cracker unit.
The Cilacap upgrade could be the first of several refinery projects Saudi Aramco is considering for Indonesia, Soetjipto said, referring to as much as $15 billion in potential investments in the Cilacap, Balongan and Dumai oil plants.
Saudi Aramco's Vice President of International Operations Said Al-Hadrami said that for now his company would focus on the Cilacap upgrade, which would "strengthen our company's global energy value chain."
Aramco also hopes to win a bid for Indonesia's Tuban greenfield refinery project, Al-Hadrami said, noting that it first pitched for the project in 2012.
Aramco and Russia's Rosneft along with three others are finalists for the $13 billion Tuban refinery. Pertamina is expected to announce on Thursday a winner from the five finalists, Pertamina refineries director Rachmad Hardadi said.
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