Indonesia‘s Refining Developments: Future Prospects and Challenges

Abstract

Since 1994 Indonesia has not built any new refineries due to the economic crisis in
1998, which was followed by political reform. Last year Indonesia had imported more than
400 thousand bpd (barrel per day) of petroleum products. On the supply side, Pertamina’s
refinery capacity of 1,050 thousand bpd produces only up to 750 thousand bpd of petroleum
fuels or 68 % of domestic consumption.
A study has been conducted on the refining development in Indonesia up to year 2030.
According to a projection based on reference scenario, in year 2030 Indonesia will consume
2.60 million bpd of petroleum fuels. If security of supply approach is taken into
consideration, Indonesia will require 3 million bpd of total refinery capacity. New refineries
producing additional 2 million bpd have to be constructed in order to fulfill domestic
demand for petroleum fuels. The additional new refineries would then be on-stream one by
one with 300 thousand bpd of capacity starting from year 2015, and would be built near
consumers’ area or close to the existing refineries.
As the margin of new refinery is not high enough, appropriate strategies such as optimum
configuration, synergy to utilize possible supporting resources should be taken into
consideration, while Indonesian government should also offers better incentives in order
to make the project economically feasible.