Pertamina Setup US$450 Million Crude Oil Terminal to Increase Crude Oil Reserve to 25 Million Barrel

28 Januari 2012 17:01 WIB

JAKARTA - PT Pertamina (Persero) has prepared tender process to realize the US$450 million Lawe-lawe Centralized Crude Terminal (CCT) project. The CCT has the capacity to store up to 25 million barrel crude oil or as much as 25-day reserve of domestic oil-refinery operation.

This project also aims to increase the energy security and to provide flexibility for Pertamina in mixing combination between domestic crude oil absorption and import. CCT Lawe-lawe also will be developed into the crude hub of southeast Asia as well as is part of Pertamina's long term plan to establish some energy hub in various regions in Indonesia.

The Lawe-lawe CCT project will provide crude oil mixing facility, including domestic crude oil that has high contaminant level to allow purchasing of various types of crude oil at competitive prices. The Lawe-lawe CCT will be part of crude oil storage facility for all domestic oil refineries.

"The construction of the Lawe-lawe CCT will provide Crude Storage with the receiving and blending facilities to increase the crude oil stock security by maximizing the absorption of domestic crude oil so that import can be minimized, which will directly reduce the rather high cost of crude oil shipping," Vice President Corporate Communication Pertamina Mochamad Harun said.

The project plan has been studied since last year to anticipate various issues, such as the declining trend of domestic crude oil production, the limitation of crude oil specification can be refined by refineries, the high transportation cost of imported crude oil, as well as the fluctuation of global crude oil price.

The project is also harmonized with the plan to develop refineries, both currently running and planned to be built by Pertamina. With the existence of Lawe-lawe CCT, flexibility of refineries is expected to increase, and better quality crude oil will increase the margin of refineries.

To realize the project, Pertamina has prepared some US$450 million investment.

"The auction and engineering, procurement and construction (EPC) processes will be started this year."

The Lawe-lawe CCT will have more than 25 million barrel capacity, which are stored into 25 storage tanks. The project is planned into two stages and will be fully completed in 2014.

So far Pertamina has finished the environmental impact analysis (AMDAL) process in the75-hectare CCT project area in Lawe-lawe, Penajam Pasir Utara, East Kalimantan. The local authority has also pledged their support, in term of faster permit process so that the project can be started speedily.

Pertamina has also expressed its strong desire to absorb all crude oil produced domestically by Cooperation Contract Contractors (KKKS). In line with the CCT project plan, the optimalization of domestic crude oil bases on the strong Company's determination to maintain national energy resistance by suppressing import of crude oil, which currently is at around 300,000 barrel a day (bph), as well as to anticipate the possibility of oil crisis if the situation in Hormuz Strait in Iran worsens.

For that, Pertamina request for the Government's support to improve the regulation for oil product to allow the option for Pertamina to purchase the KKKS' crude oil. Pertamina's effort to buy up KKKS' crude oil has gain full support by the Upstream Oil and Gas Supervisory Agency (BPMIGAS), however currently there is no regulation on this matter and the improvement on the regulation is needed so that KKKS are willing to sell their part of crude oil for domestic refineries.

Beside sending the letter to BPMIGAS, Pertamina has also sent the purchasing request letter of domestic crude oil to all KKKS that are still exporting their part of crude oil, which reach around 210,000 bph.

"Pertamina is ready to give best offer to these KKKS," Harun said.

Besides securing crude oil stock, Pertamina has also strengthen the stock of fuel (BBM) by constructing the Sambu Island Hyper Terminal BBM utility and facility in Riau Islands with the capacity of 300,000 kiloliter (KL) at the investment budgeted at US$50 million. The Hyper Terminal BBM will also host the bonded warehouse with the capacity of 300,000 KL and 3 ports with the maximum vessel size of 100,000 DWT (dead weight tons) and maximum draft of 18 meters. Also, it will host office area and Safety, Workplace Health and Environmental Protection (K3LL) facilities.

"The Sambu Island Hyper Terminal BBM project and the Lawe-lawe Centralized Crude Terminal project are important milestones in Pertamina's long term plan to create energy hub in various region in Indonesia," Harun explained.