Pertamina has received funding credit support worth US$ 3.1 billion or the equivalent of Rp. 46.15 trillion from the Export Credit Agency (ECA) and several commercial financial institutions for the completion of the Refinery Development Master Plan (RDMP) project for the Balikpapan Refinery.
Funds for refinery improvement
The Balikpapan Refinery Project is one of the National Strategic Projects (PSN) managed by PT Pertamina Balikpapan Refinery (KPI). The RDMP project is designed to increase processing capacity from the original 260,000 barrels per day to 360,000 barrels per day with an increase in quality from Euro II to Euro V.
Meanwhile, Euro quality improvement refers to exhaust emission standards for four-wheeled or more motorized vehicles so that the emissions released are more environmentally friendly and below the maximum limit for polluted substances or materials.
The emission standards issued at Euro 2 and Euro 4 have various differences. The emission limit for Euro 2 (diesel) is CO: 1.00 g/km HC + NOx: 0.70 g/km PM: 0.08 g/km, while for Euro 4 CO: 0.50 g/km HC + NOx : 0.30 g/km NOx: 0.25 g/km PM: 0.025 g/km.
This project is a form of Pertamina’s efforts to meet national fuel needs, will later produce petrochemicals, namely propylene of 225 KTPA and will become feedstock from New Polypropylene (PP) Balongan to substitute imported products.
This funding includes the construction of a New Workshop & Warehouse, Residual Fluid Catalytic Cracking (RFCC), Feed Tanks, Boilers, New Flare Balikpapan (BPP) II, FCC & FCC NHT (Naphtha Hydrotreating Unit), and Terminal Lawe-Lawe Facilities.
Loan funds still needed
Previously, the government had received a loan from Eximbank from the US worth US$ 99.7 million (IDR 1.47 trillion) which was used to increase gasoline production up to 101,000 barrels per day.
The loan covers the export of equipment and services of approximately US$ 63.9 million to upgrade and expand the refinery’s processing facilities.
“Could substantially reduce its dependence on imported transportation fuels while upgrading to cleaner standards,” said Reta Jo Lewis, Exim President, on May 15, 2023.
The company is still seeking other funding from various international financial institutions to smooth the Balikpapan Refinery project.
Pertamina’s Director of Finance, Emma Sri Martini, said the company is still looking for other sources of funding from international financial institutions to make the Balikpapan refinery project smooth.
The funds received from ECA have only contributed half of the total expansion investment which reached US$ 7.24 billion.
“Funding from ECA and several lenders is about to close. The facility that Pertamina has obtained is approximately US$ 3.1 billion,” said Martini, on June 14, 2023.
Through this funding, the government wants to increase refinery processing capacity to 360,000 barrels per day, as well as improve the quality of crude oil processing to produce Euro V-equivalent fuel.
Apart from international loans, financing for the Balikpapan Refinery project also comes from the company’s internal finances worth US$ 1 billion (IDR 15.2 trillion).
Meanwhile, the expansion of the oil refinery has now reached 72% and is targeted to undergo testing in 2024.
