Russian oil giant Rosneft and Indonesian state-owned oil and gas company Pertamina have established a joint venture that will develop the Tuban grass root refinery and petrochemical complex (TGRR) in Indonesia.
Named as Pertamina Rosneft Pengolahan dan Petrokimia (Indonesia), the joint venture company (JV) will be owned 55% by Pertamina and 45% by Rosneft.
Rosneft and Pertamina have carried out the project feasibility study of the proposed oil refinery at Tuban in the East Java province and are now set to move to basic engineering and design (BED) of the project.
Construction of the refinery project is expected to be completed by 2021 end. Bloomberg, citing Pertamina president director Dwi Soetjipto had reported that the JV partners could invest $12-13bn in the project.
TGRR is being designed to have refining capacity is 15 mmpta (300 kbpd). The petrochemical complex is estimated to produce 1mmtpa of ethylene and 1.3mmtpa of aromatics.
TGRR’s feedstock will be medium and heavy sulfur crude oil grades with the complex’ crude oil terminal designed to store Very Large Crude Carriers (VLCCs) of up to 300 thousand tonnes.
Rosneft, in a statement, said: “The attractive market conditions of Indonesia and the expected consumption growth enabled the working group of Rosneft and Pertamina to develop a competitive concept of the new refinery and petrochemical complex.”
The JV will also manufacture motor fuels to meet the increasing demand in Indonesia which currently imports a bulk of refined products. The country is also facing a significant deficit of petrochemical products like polyethylene and polypropylene.
By establishing the JV, Rosneft expects to grow its presence in the Indonesian energy market and also boost its status as a dependable partner in upstream and downstream projects across the Asia Pacific region.