Rosneft, Pertamina sign Tuban petchem deal

ROSNEFT has formed a joint venture with Indonesian state oil and gas firm Pertamina to implement Pertamina’s proposed 300,000 bbl/d Tuban refining and petrochemicals complex in East Java.

Under the terms of the deal, Rosneft will carry out a feasibility study for the complex, which will have a design capacity of 15m t/y and process imported medium and heavy grades of sulphurous crude oil. It will include a large fuel oil catalytic cracker as well as the petrochemicals production complex. The coastal site will have port facilities for 300,000 t VLCC supertankers.

According to reports in Indonesia’s Jakarta Post, the deal is worth US$13.8bn, with Pertamina holding the controlling 55% stake in the joint venture and Rosneft the remainder. The output of the complex will be 45% petrol/gasoline, 35% diesel and 20% petrochemicals.

The two parties will not make a final investment decision on the plant until basic engineering and design (BED) work and front end engineering and design (FEED) work have been carried out. The plant could be operational by 2022.

The agreement also sets out terms for a long-term partnership between the two companies. This will see Rosneft and Pertamina work together to investigate the potential for further joint venture projects in oil, logistics and infrastructure, as well as giving Pertamina the opportunity to join Rosneft as an equity partner in upstream projects in Russia and in international refining projects.

“The geographical location of Indonesia, at a crossroad between two oceans, the Pacific and Indian, opens the way for the country for turning into a global transportation and energy hub which could become a critical point for global economic growth,” said Rosneft chairman Igor Sechin, adding: “In this regard the establishment of partnership relations with Pertamina is the logical development of expanding Rosneft activities in the Asia-Pacific region.”