Indonesia's Pertamina reaches $3.1bn financing deal to upgrade oil refinery
Business
Funds will be used to expand Balikpapan to a capacity of 360,000 bpd from present level of 260,000
JAKARTA (Reuters) – Indonesia's state energy company Pertamina reached a $3.1 billion financing deal with a number of export credit agencies and commercial banks to fund the upgrade of its Balikpapan refinery, the company said on Saturday.
The lenders include export credit agencies from South Korea, Italy and the United States, and 22 commercial banks, Pertamina said in a statement.
Pertamina will use the funds for the expansion of its Balikpapan oil refinery to a capacity of 360,000 barrels per day (bpd), from 260,000 bpd. The refinery would also be able to produce fuel with Euro V emission standards after the upgrade, the company said.
"With the improvements, Pertamina will be able to produce more environmentally friendly fuels and this certainly will support reaching Indonesia's net-zero emissions target," said Pertamina spokesperson Fadjar Djoko Santoso.
Read more: Aramco, TotalEnergies sign $11bn contract to build petrochemicals complex in Saudi Arabia
As of June, the Balikpapan construction was about 74 per cent complete, according to Feri Yani, president director of Kilang Pertamina Balikpapan, the company unit responsible for the refinery.
The Balikpapan project is part of Pertamina's long-term refinery investment blueprint, a 2015 plan to nearly double its total processing capacity to 1.5 million bpd.
Read more: South Korea trumpets Hyundai's $5bn contract with Aramco
Earlier this year, the chief executive of Pertamina's refinery group said the company is adjusting its expansion plans to align with the global transition towards the greater use of renewable energy.
