TEMPO.CO, Jakarta-The government is targeting for Bontang refinery's groundbreaking to take place next year. Energy and Mineral Resources Sudirman Said ensured this following the ratification of Presidential Regulation No. 3/2016 on Refineries.

The construction project of Bontang refinery in East Kalimantan will be done through a public-private partnership (P3) scheme. "Pertamina has been appointed to be in charge of the project," Sudirman said in Jakarta Tuesday, February 9.

As the party in charge, Pertamina will seek private partners, accompanied by international consultants appointed by the Finance Ministry.

The government has prepared two incentives for Bontang investors; free facility sharing and the chance to get their tax holiday extended for another 15 years.

In addition to build Bontang refinery as a way of increasing Indonesia's oil producing capacity, Pertamina also plans to enhance the capacity of four existing refineries. Cilacap, Balikpapan, Dumai, and Balongan refineries will undergo a capacity upgrade through the Refinery Development Master Plan (RDMP).

Indonesia is estimated to need 2.6 million barrels of oil a day (MMbod) by 2025. With RDMP and new refineries, the state can supply 2.2 to 2.3 MMbod.

"Without new refineries, we could be the world's largest oil importer," said Edwin Hidayat Abdullah, deputy for energy, logistics and tourism division at the Ministry of State-owned Enterprises.

Edwin said that Bontang refinery is one of the new refineries included in Pertamina's and the SOE Ministry's roadmap the construction is estimated to cost US$14 billion. Another refinery in Tuban requires an investment worth US$13 billion.

TEMPO