Saudi Aramco, Pertamina sign deal for refinery upgrade

Saudi Arabian Oil Co. (Saudi Aramco) and Indonesia’s state-owned oil and gas company Pertamina have signed a heads of agreement deal related to the upgrade of Cilacap oil refinery in central Java, Aramco said in a statement.

The upgrade, the total value of which is estimated at $5 billion, will enable the refinery to process more sour crudes, meet high quality product specifications (Euro IV) and produce basic petrochemicals and lubricant base oils.

The project is expected to be on stream in 2021.

Also, the capacity expansion to 370 MBD will help Indonesia meet its increasing demand of refined products, lubricant base oils and petrochemicals.

The move is a major step towards forming a joint venture between the two firms.

The exact ownership terms of the joint venture have not yet been disclosed; however, Pertamina plans to hold a majority stake. The contract includes a long-term supply agreement for Arabian crudes to Cilacap refinery, the statement said.

Indonesia is set to officially rejoin OPEC in December, six years after the country’s membership was suspended.