The Ministry of Energy and Mineral Resources (ESDM) has announced that the Balikpapan Refinery Development Master Plan (RDMP) project is slated to be fully operational by 2025.
ESDM Minister Arifin Tasrif expressed his hope that the project will meet its deadline, emphasizing the financial implications of any delays.
“If we can achieve additional income and efficiency, it will be beneficial. But if there’s a delay, we stand to lose,” Arifin said during a working visit to East Kalimantan on Sunday, August 11, 2024.
He noted that the construction of the Balikpapan Refinery has already reached 91 percent completion. He, however, acknowledged several challenges that need to be addressed to ensure the project reaches 100 percent.
“The challenges involve coordination between the owner and the contractor. We hope these issues can be resolved promptly so that construction progress can be maintained,” Arifin said.
To overcome these challenges, Arifin asked the State oil and gas company PT Pertamina to take immediate steps to ensure the project’s completion.
He emphasized the importance of not only meeting the project timeline but also maintaining high-quality standards.
The Balikpapan Refinery project is part of the National Strategic Projects, recognized as a vital national asset due to its significant impact.
“This refinery will enhance both the capacity and quality of fuel production. Additionally, it will contribute to the production of LPG, polypropylene, and other products,” Arifin said.
The RDMP Balikpapan project represents a substantial investment, valued at US$7.4 billion (Rp117.6 trillion). Of this, US$4.3 billion is sourced from equity, while the remaining US$3.1 billion is financed through loans supported by the Export Credit Agency (ECA).
In addition to challenges related to the owner-contractor relationship, Arifin highlighted the impact of the COVID-19 pandemic, which disrupted construction progress.
Other obstacles include geopolitical issues, such as the Russia-Ukraine conflict, which has affected logistics systems.
Despite these hurdles, the ministry remains optimistic about the project’s timely completion, stressing its importance for Indonesia’s energy security and economic development.
