PT Pertamina has successfully secured a substantial funding of US$7.2 billion to support the Balikpapan Refinery Development Master Plan (RDMP) project.
The project, located in East Kalimantan, is listed in the National Strategic Projects (PSN) aimed at enhancing the capacity and processing capabilities of the Balikpapan refinery.
“Regarding the funding for Balikpapan RDMP, it has been completed. We have obtained project financing from 20 banks, including those from South Korea,” Pertamina’s Director of Strategy, Portfolio, and Business Development Atep Salyadi Dariah Putra said, on Wednesday (7/5).
Global and local banks behind refinery project
Currently, the overall external funding required for the project reaches US$3.1 billion. This comprises loans from global financial institutions totaling US$2.3 billion and additional US$800 million from domestic and foreign commercial banks.
The global financial institutions involved in financing the Balikpapan RDMP project represent three countries, including South Korea, the US, and Italy.
There are also local and foreign banks such as Bank Rakyat Indonesia (BRI), Bank Mandiri, Bank Negara Indonesia (BNI), and Bank Tabungan Negara (BTN) that are interested in providing funds for the project.
In May, Pertamina secured US$99.7 million in export financing from US EXIM Bank to support the expansion of the Balikpapan refinery. Additionally, in December last year, Korea Eximbank signed a project financing agreement worth US$1.19 billion for the Balikpapan refinery.
RDMP project’s phases
The Balikpapan RDMP project is divided into two phases. The initial phase, scheduled for completion in 2024, will increase the production capacity of the Balikpapan refinery from current installed capacity of only 260,000 barrels oil per day (BOPD) to 360,000 BOPD.
This also ensures the refinery adheres to the environmentally friendly Euro V standards, leading to the production of cleaner fuel oil products.
The second phase, expected to complete in 2026, aims to enhance the refinery’s operational flexibility in crude oil supply. This enhancement enables the facility to process a broader range of oils available in the market at a more cost-effective price.
Currently, the refinery can only process oil with a sulfur content of two percent. With the enhanced processing capabilities, the refinery will be able to handle oil with a higher sulfur content of up to five percent. This notable upgrade will have a significant impact on production.
RDMP project to drive significant production impact
Once the RDMP project is completed, the Balikpapan refinery is projected to procure 122,000 barrels per day of gasoline, 156,000 barrels per day of gasoil, and 41,000 barrels per day of jet fuel.
In comparison, the current production stands at 37,000 barrels per day of gasoline, 114,000 barrels per day of gasoil, and 29,000 barrels per day of jet fuel.
Furthermore, the RDMP project will also boost the production of other essential products beyond fuel oil. It is estimated that the refinery will generate approximately 225,000 tons per year of propylene and 384,000 tons per year of liquefied petroleum gas (LPG), further enhancing its overall output capacity.
