Tuban Petrochemical to ease Indonesia's oil import pressure

Late last week, Saturday to be exact, condensates from Senipah field started to flow into the giant petrochemical complex operated by Tuban Petrochemical Industries. And in just two-weeks away the complex would start the commercial production of not just petrochemicals but most importantly fuels.

While the complex's main products are paraxylene (500,000 tones per year), toluene (100,000 tones), and ortho-xylenes (120,000 tones), it has design capacity to produce 1.1 million tones of kerosene, 335,000 tones of reformate, and 189,000 tones of diesel fuel per year as well.

On top of that, Tuban Petrochemical would produce around one million tones of light naphta per year, an important raw material for upstream petrochemical industries.

"That would ease little bit the pressure on Indonesia's fuels import," said Amir Sambodo, commissioner at Tuban Petrochemical.

State-owned oil and gas company PT Pertamina owns 15% shares in the complex and is preparing to build a refinery next door in a cooperation with China's Sinopec. But Pertamina expressed it's upset for the uncertainty at the Sinopec side and would invite other investors to materialize the project.

Rumors said government might ask ExxonMobil to build the refinery in exchange of its support for the US company to operate the giant Cepu oil and gas block. The crude oil produced from Cepu (could reach 200,000 barrel per day at peak production) would be the raw material for the Tuban refinery.

Despite the startup of Tuban Petrochemical, the shutdown of Balongan refinery in West Java pose a threat in short term. Fortunately in the last few months fuels demand decreased significantly due to price hike imposed on October 2005.

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