Rosneft, Pertamina ink deal for integrated refining complex

Russia’s OJSC Rosneft and PT Pertamina (Persoro) of Indonesia have signed a framework agreement to cooperate on development of a grassroots refining and petrochemical complex to be built at Tuban, in East Java, Indonesia.

As part of the agreement, Rosneft and Pertamina will perform a bankable feasibility study to finance the project as well as establish a joint venture for its implementation, Rosneft said.

The companies also have agreed to execute studies to investigate the following:

• Prospects for joint projects in the area of crude and oil products supplies, logistics, and infrastructure.

• Potential for Pertamina to enter in Rosneft’s upstream projects in Russia as an equity holder.

• Partnership in international joint projects for oil refining.

Rosneft said the companies will take final investment decision on the proposed complex once they have completed the feasibility study, basic engineering design (BED), and front-end engineering design (FEED) for the project.

The agreement follows Pertamina’s previously announced plans to build refineries and upgrade existing plants as part of its strategy to reduce fuel imports into Indonesia by boosting domestic production (OGJ Online, Dec. 15, 2014).

Rosneft, which has led competition for a share in the long-stalled Tuban complex, views the agreement as a launching pad for expanding its footprint as a reliable partner in oil and gas production as well as refining throughout the Asia-Pacific region.

“The geographical location of Indonesia, at a crossroad[s] between two oceans, the Pacific and Indian, opens…the way for turning [the country] into a global transportation and energy hub which could become a critical point for global economic growth,” said Rosneft Chairman Igor Sechin.

A timeframe for when the companies would complete the feasibility study, BED, and FEED on the project was not disclosed.

Most recently, Pertamina (Persoro) and partner Saudi Aramco let a contract to Amec Foster Wheeler PLC to provide engineering and project management services for the upgrade and expansion of the 348,000-b/d Cilacap refinery on Java, Indonesia, as part of the Indonesian operator’s Refinery Development Master Plan (RDMP) to increase the country’s energy security and ensure the long-term competitiveness of its refineries (OGJ Online, May 23, 2016; Oct. 7, 2013).

The planned 15 million-tonnes/year Tuban refinery would be configured to process imported volumes of medium to heavy, sulfurous crudes and include a large fuel oil catalytic cracking unit, Rosneft said.

Tuban’s integrated petrochemical complex also would be able to accommodate very large crude carriers as large as 300,000 dwt, the Russian operator said.

Contact Robert Brelsford at

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