The Ministry of Energy and Mineral Resources (ESDM) has confirmed that Russia remains committed to funding the Grass Root Refinery (GRR) project at the Tuban Refinery.

"We have met with Russia (representatives), they are still committed to providing funding," Dadan Kusdiana, Secretary General of the Ministry of Energy and Mineral Resources, said on Friday, March 21, 2025.

He cited that the project is still in the final investment decision (FID) stage. However, he was reluctant to provide certainty about when the FID for this project will be completed.

The Tuban Refinery − a collaborative project between State energy company PT Pertamina and Russian oil and gas company, Rosneft − is located in East Java with an investment value of Rp54.2 billion (US$ 3.8 billion). 

This project is managed by Pertamina International Refinery (KPI) together with Rosneft through a joint venture company PT Pertamina Rosneft Pengolahan dan Petrokimia (PRPP) which was established in November 2017 with an ownership scheme of Pertamina 55 percent and Rosneft 45 percent.

In October 2019, Rosneft and Pertamina signed a refinery design contract with selected contractors. However, both are facing funding challenges due to European Union (EU) sanctions against Russia as a result of the war in Ukraine.

The refinery is designed with a processing capacity of 300 thousand barrels per day and is estimated to produce 30 million liters of fuel oil, including gasoline and diesel, per day.

FID delay

KPI Corporate Secretary Hermansyah Y. Nasroen has said earlier that the large scale of the project and its nature of starting from scratch were the main factors in the delay in the FID.

"Because this project is very big and the grassroots start from zero. So the FID process may take a long time," Hermansyah said on March 10, 2025.

However, he ensured that there were no significant obstacles in the preparation of the FID. KPI still targets its completion this year.

After the FID is determined, KPI will immediately continue with the construction of the refinery. However, this stage still depends on the final results of the FID. Currently, the preparation of the FID is still at the KPI level and is carried out in parallel with the Integrated Project Consultant (IPC) tender. 

Hermansyah emphasized that cooperation with Rosneft continues through the Joint Venture (JV) scheme.