The government will auction mini refinery projects in seven clusters that have been established in October or November 2016. According to the Energy and Mineral Resources Ministry, many contractors have expressed interest to build mini refineries.

“We will try to announce the procedures, scheme and everything else before the end of the year” the ministry’s Oil and Gas Director General I Gusti Nyoman Wiratmaja Puja said in Jakarta Friday last week, Bisnis Indonesia Reported.

The Ministerial Decree No.22/2016 on the Development of Small-scale Oil Refinery was issued to optimize the sales-ready production or lifting of crude oil and condensate. For cluster-type refineries, the COW contractors in the nearest location must commit to supply crude oil.

Meanwhile, mini refineries that are not located in a cluster can seek crude oil supply from abroad.

If a particular cluster is not attracting bidders, the government can give a special assignment to state energy company Pertamina. However, if there are business entities interested in the cluster, the government will tender-out the project.

Tri Wahana Universal has expressed its desire to take part in the auction. President director Rudi Tavinos said there are provinces and regencies with potentials to build refineries with a production scale of less than 20,000 barrels per day (bpd). Having mini refineries around will allow businesses to save expensed by importing less crude oil and products.

source: tempo.co/bisnis.com