Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, has hinted at the possibility of securing a new investor for the Tuban Grass Root Refinery (GRR) project if Russia’s Rosneft Oil Co PJSC fails to provide clarity on its commitment to the venture.
The refinery project, which involves PT Kilang Pertamina Internasional (KPI) and Rosneft, has faced setbacks partly due to geopolitical issues.
“We may look for a new investor, as we cannot afford prolonged delays. There needs to be a timeframe,” said Bahlil on Thursday, November 14, 2024 emphasizing the urgency for a decisive approach if Rosneft’s engagement remains uncertain.
The Tuban refinery, valued at approximately US$3.8 billion (Rp54.2 trillion), is designed to process 300,000 barrels of crude oil per day and produce around 30 million liters of fuel daily, including gasoline and diesel.
However, while the Ministry aims to finalize the project’s Final Investment Decision (FID) by the end of November 2024, Bahlil indicated further discussions with Pertamina are essential to determine whether Rosneft remains a committed partner.
The project has already encountered obstacles, including land acquisition, incentives, and permits, which Bahlil helped address during his tenure as Minister of Investment.
Currently, PT KPI, a subsidiary of State energy compny PT Pertamina, continues to collaborate with Rosneft through PT Pertamina Rosneft Pengolahan dan Petrokimia (PRPP) to progress the project.
Hermansyah of KPI confirmed that FID is expected to be completed by Q4 2024, expediting the timeline initially set for 2025.
As one of Indonesia’s largest oil refinery projects, the Tuban GRR aims to bolster domestic fuel production capacity, enhancing energy security and reducing dependence on imports.
