January 30, 2018 / 9:39 AM / in a year

Indonesia's Pertamina picks Oman's OOG, Cosmo Energy for $10 billion refinery

JAKARTA (Reuters) - Indonesia’s Pertamina appointed a consortium of partners to develop a new $10 billion refinery at Bontang, said Ardhy N. Mokobombang, director of refinery megaprojects and petrochemicals at the state-owned energy company.

PHILE PHOTO: A view of state-owned oil giant Pertamina's refinery unit IV in Cilacap, Central Java, Indonesia January 13, 2016. REUTERS/Darren Whiteside/File Photo

Indonesia, one of Southeast Asia’s biggest fuel importers, hopes to reduce its import bill by improving its ageing domestic refining infrastructure, but some projects have been delayed because of financing issues.

Pertamina hopes to soon finalize a framework agreement with Oman’s Overseas Oil and Gas LLC (OOG) and Cosmo Oil International, a trading unit of Japan’s Cosmo Energy Holdings, to develop the Bontang facility, Mokobombang said on Tuesday.

The Oman government will provide financial support for the project, in which Pertamina expects to take an initial 10 percent stake, Mokobombang said.

Pertamina would have the rights to supply 20 percent of the crude for the refinery, and Oman the remainder, he said.

Pertamina plans to reach a final investment decision on the 300,000-barrel-per-day Bontang grass roots refinery project in mid-2020, he said.

“Hopefully in 2025 this refinery will be operational,” Mokobombang told reporters.

A spokeswoman for Cosmo Energy Holdings in Japan did not immediately respond to a request for comment on the matter.

OOG is "active in the development of a number of energy related projects," including a refinery project in Indonesia, it said on its website. (bit.ly/2Ft54Gq)

OOG could not be reached for comment.

Reporting by Wilda Asmarini in JAKARTA; Additional reporting by Osamu Tsukimori in TOKYO; Writing by Fergus Jensen; Editing by Tom Hogue

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