TEMPO.CO, Jakarta - PT Pertamina (Persero) agreed to cooperate with Saudi Arabian oil company, Saudi Aramco, to build an oil refinery. Pertamina president director Dwi Soetjipto said the two firms will establish a joint venture company to work on the revitalization of the Cilacap refinery at the end of this month.

"The refinery will be one of the largest in the Asia-Pacific region," Dwi said Tuesday, November 24.

Pertamina and Aramco will sign a front-end engineering design (FEED) deal for the Cilacap refinery revitalization on November 26. Dwi is targeting the project to start at the beginning of next year. To improve and boost the production capacity of Cilacap refinery, Pertamina and Aramco will invest US$5.5 billion.

According to Dwi, Pertamina gets a 5- percent ownership in the joint venture.

The Pertamina-Aramco joint venture will increase Cilacap refinery's processing capacity from 348,000 to 460,000 barrels per day (bpd). The type of oil processed by the refinery would also be changed: from sweet crude to sour crude.

The refinery will be equipped with a hydrocracker unit to process diesel and aviation fuel. Dwi promised to get the best kind of oil so that processing costs and selling prices would be cheaper.

"The product value is increased from 73 percent to 98 percent," he said.

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