Chinese investors plan to build oil refinery in Indonesia

An official from the Indonesian Coordinating Ministry for Maritime Affairs and Investment has said that Chinese investors plan to develop a multi-billion-dollar oil refinery in Batam, Riau Islands province of Indonesia.

11, Jun. 2020

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JAKARTA, VNA - An official from the Indonesian Coordinating Ministry for Maritime Affairs and Investment has said that Chinese investors plan to develop a multi-billion-dollar oil refinery in Batam, Riau Islands province of Indonesia.

Maritime and energy sovereignty deputy Purbaya Yudhi Sadhewa told an online press conference on June 9 that the investors had sent a letter addressed to the ministry asking for supporting an investment worth around 5-6 billion USD.

Purbaya did not identify the investors or provide details on the refinery’s installed capacity, but he affirmed that foreign investors are still interested in Indonesian refineries, despite recent developments.

On June 5, director of State-owned energy holding company Pertamina Ignatius Tallulembang said Saudi Arabia’s Aramco had pulled out of the 5 billion USD Cilacap project after a prolonged negotiation process. Earlier this year, Italy’s Eni also withdrew from the Plaju project in South Sumatra province.

However, Purbaya said “I am optimistic that we can [proceed with these] investments if we guard them well.”

The unnamed Chinese investors also sought to export some of the refinery’s output, which was why they planned to develop the project in the Riau Islands, he added.

The provincial capital of Batam is just across the Singapore Strait from the island nation and is the closest point in Indonesia to Singapore.

Purbaya said it appeared that the investors may not be required "to partner with Pertamina for the refinery", but that some of the refinery’s output "might need to be adsorbed domestically”. - VNA