Indonesia’s Pertamina has secured financing for the development of the Balikpapan refinery, with the aim of increasing its production and carrying out upgrades that will expand the production of environmentally friendly fuel that respects emissions standards.
The company continues to implement a plan it announced in 2015, which aims to double processing capacity, by an estimated 1.5 million barrels per day, through a long-term investment plan, according to what Reuters reported today, Saturday (June 24, 2023).
The company views the Balikpapan refinery development project as part of the investment plan, especially as it is flexible enough to adjust and change to match the global trend towards renewable and clean energy paths, according to what the specialized energy platform has followed.
Financing development plans
The Indonesian company Pertamina has entered into a financing agreement with representatives of agencies and banks, including agencies affiliated to South Korea, Italy and America, in addition to signing with 22 commercial banks.
The lenders’ financing amounted to an estimated $3.1 billion, mainly aimed at developing the Balikpapan refinery, as the Asian state-owned company plans to raise the refinery’s capacity by 100,000 barrels per day from 260,000 barrels to 360,000 barrels.
In addition to increasing capacity and production capacity, Pertamina seeks to take a serious step towards producing the refinery – which was 74% completed in June – of environmentally friendly fuel that takes into account emissions standards, a goal that development work contributes to achieving.
In turn, a spokesman for the Indonesian company Pertamina, “Vadjar Djoko Santoso”, confirmed that the expected development of the Balikpapan refinery contributes to the company’s keeping pace with the country’s goals regarding carbon neutrality.
Santoso added that after the completion of the development work, the company will be able to produce environmentally friendly fuels, which will eventually be in the interest of reducing emissions.
Rolling plans
From time to time, the Indonesian company Pertamina reinforces its expansion plans with investments aligned with climate goals and energy transition paths.
Over the past year, the Indonesian company Pertamina revealed its intention to expand carbon capture and storage projects, in an attempt to reduce emissions from oil and gas activities.
The company said – at the time – that it is considering integrating a carbon capture project at the Balikpapan refinery, as low-carbon fuels are produced through products derived from emissions and carbon such as methanol.
The company has previously announced a goal of reducing emissions by 30% by the end of the decade 2030, in parallel with increasing the renewable energy mix by 17.7%.
The Indonesian company agreed with its American counterpart, Chevron, to cooperate, with the aim of exploring opportunities for low-carbon investments in the country located in southeast Asia.
Investing after the fires
The Indonesian company Pertamina aims to increase the processing capacity of its refineries and facilities, to reach 1.5 million barrels per day, and said that the development of the Balikpapan refinery is one of the most prominent directions of its long-term investment plan announced in 2015.
The company has made adjustments to its investment plans, with the aim of ensuring that expansions adapt to the global trend aimed at reducing emissions and increasing reliance on renewable and clean energy sources.
Over the past two years (2022) and the current one (2023), the refineries and facilities of the Indonesian company have been subjected to repeated accidents, including fires and explosions.
A refinery under the management of Pertamina, located in the west of the country, exploded in early April, making it the third accident of its kind in one month, as it was preceded by two similar incidents of fires that broke out in some facilities in March, one of them at a gas station, and the second on board an oil tanker.
Explosions and fires during the months of March and April killed more than 20 people and injured 9 others, in addition to stopping the work of several units after being damaged.
The incidents of Pertamina’s facilities were not the result of the current year 2023 only, as last year witnessed a fire in the company’s oil refinery twice, separated by only two months (in March and May).
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